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Date: 9th April 2024.

Gold Renews Its All-Time Highs, But Oscillators Point to Caution!

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* US indices underperform compared to global stocks as investors await the latest US inflation data.
* Oil is trading almost 22% higher in 2024 applying upward pressure on inflation and triggering a more cautious approach to tomorrow’s Consumer Price Index.
* The US Dollar declines and Gold rises in value despite the possibility of a more hawkish Federal Reserve.
* The head of the Federal Reserve Bank (FRB) of Dallas, Mrs Logan, advises it’s too early to think about lowering interest rates since the danger of inflation stabilizing above the target level remains.

XAUUSD – Buyers Maintain Control but Oscillators Point To The Assets Being Overpriced

The price of Gold trades steadily higher during this morning’s Asian session and is attempting to break yesterday’s all-time high. Gold has risen more than 15% since February 2024 as investors look at an alternative hedge against inflation. In addition to this, many countries including China and India look to lower exposure to the Dollar ahead of US elections. However, investors should note that if US inflation reads higher than expectation, demand for the Dollar may return.

Investors also should note that the inverse correlation between Gold and the US Dollar is slightly weaker than traditionally seen. Therefore, even with a more expensive Dollar, the price of Gold may simply retrace or correct, but retain the longer-term gains. According to Friday’s report from the US Commodity Futures Commission, the number of speculative positions for “sellers” remains weak. The latest report confirmed that only 0.719k more contracts were added for sellers and more than 21.200k added for buyers.

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Technical analysis for Gold is two sided. Momentum-based indicators point towards an upward price movement as does price action. However, oscillators indicate the asset may be trading above its intrinsic value and may correct. A short-term correction may decline between 2,292.29 and 2,318.78. For another bullish impulse wave, technical analysts point at a target of 2,376 based on Fibonacci levels and the size of previous impulse waves.

EURUSD – ECB Rate Cut Upcoming According to Analysts

The Euro is gaining momentum since the start of the European Trading session. However, the price is trading slightly lower than the day’s open price. In addition to this, in the short-term the price is forming lower lows and lower highs. When monitoring each currency individually, the US Dollar is trading slightly higher while the Euro is unchanged.

No major economic data has been released in the past 24 hours or is due today. However, volatility is likely to significantly rise from tomorrow onwards. If US consumer inflation reads 3.5% or more, the price of the Dollar is likely to gain. If the monthly producer inflation on Thursday also reads higher than 0.3%, this will further fuel a potential bearish impulse wave.

However, another key factor will be the European Central Bank’s Rate Decision and Forward Guidance. If the ECB suddenly become more dovish, as analysts believe, the Euro may again struggle to hold onto its value, if the Fed are unlikely to adjust. Currently there is more pressure on the ECB to cut interest rates considering inflation has returned to normal levels amongst most state members and most countries are witnessing stagnation. Analysts currently expect the European regulator to be the first to cut interest rates and believe this will take place in June.

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Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE  to access the full HFM Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE  to register for FREE!

Click HERE to READ more Market news. 

Michalis Efthymiou
Market Analyst
HMarkets

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
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Date: 10th April 2024.

The Fed Is Willing To Lower Expectations To Only 1 Cut In 2024!

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* European defence stocks tumble and see the largest decline in 18 months as Goldman Sachs analyst warns the category is trading above its true value.
* US Treasuries Yields and the US Dollar Index remain unchanged as investors hold their breath ahead of today’s inflation release.
* Analysts expect US inflation to increase from 3.2% to 3.4%, but for Core inflation to decline to 3.7%.
* Federal Reserve President of the Atlanta bank, Mr Bostic, advises he is willing to adjust the outlook to only 1 rate cut in 2024. Keep reading to find out why and what the requirements will be.

GER40– Defence Stocks Overvalued According to Goldman Sachs

The DAX as well as general European Indices came under pressure from comments from a market respected analyst. According to the Goldman Sachs Analyst, Victor Allard, shares in European defensive stocks were trading above their true value and have little potential for further gains. As a result, stocks such as Rheinmetall AG, BAE Systems and Saab AB witnessed sharp declines. Saab AB stocks fell almost 10% within a single session.

However, the sentiment towards European stocks were dampened as a result of this. The main reason for Mr Allard’s view is the stock ratios do not back the growth. A good example of this is the price to earnings which is extremely high. Furthermore, Allard pointed out that defence stocks trade now at nearly 20 times forward earnings.

When monitoring the top 7 stocks which hold the highest weight within the index, the market can see a clear sign of profit taking. Five of these stocks have risen more than 10% in 2024 so far, which is higher than traditional gains, but over the past five days a large portion of that has been lost. The only stock which has seen strong gains and has maintained its momentum is Mercedes Benz which has risen almost 22% in 2024 so far. The most important stocks for the index during this earnings data will remain SAP SE, Siemens AG and Allianz.

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The price of the index will now largely depend on tomorrow’s European Central Bank press conference and statement. Investors are keen to see when the ECB and Federal Reserve are likely to cut interest rates. If the regulator takes a more dovish approach, the economy is likely to witness much needed stimulation and investor sentiment towards the region is likely to rise. In addition to this, the Euro can potentially make indices cheaper to buy. As a result, this can support the DAX as well as other European indices. In the meanwhile, this afternoon’s US inflation data will be the key price driver for all assets.

USA100 – Price Performance Dependent on Fed Rate Adjustments and Today’s CPI!

The performance of the USA100 will primarily be dependent on this afternoon’s inflation data. However, technical analysts have been keen to point out that the US stocks have been unwilling to form strong longer-term declines. Nonetheless, higher inflation potentially can trigger a lower risk appetite and lower demand for equities. Particularly investors will be looking to see if inflation reads higher than the 0.3% expectations, including the Core CPI.

Later within the evening, investors will also be closely monitoring the FOMC Meeting Minutes for clues as to where the committee stand on possible interest rate cuts. This week Mr Bostic has already advised he would be willing to lower expectations for future cuts if inflation does not allow the Fed to act. According to Mr Bostic, he could consider lowering possible future adjustments from 3 cuts to only 1 for 2024. However, Mr Bostic said this was only possible if inflation stabilized above the target and the employment sector remains resilient. So far, jobs growth remains and it’s all dependent on inflation.

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Technical analysis for the USA100 is signalling neither a sell or buy. The price is trading slightly higher than the 75-Bar EMA and at the 55.00 mark on the RSI. However, the price is forming a horizontal price range this morning. Therefore, for a buy signal to be confirmed, the price will need to form a bullish breakout and ideally inflation will not beat expectations.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE  to access the full HFM Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE  to register for FREE!

Click HERE to READ more Market news. 

Michalis Efthymiou
Market Analyst
HFMarkets

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
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Date: 12th April 2024.

Producer Inflation On The Rise, But Will Earnings Hold Demand Steady?

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* Producer inflation rose slightly less than previous expectations, but the annual figure continues to rise. The annual PPI rose to 2.1% and the Core PPI rose to 2.4%.
* The NASDAQ and SNP500 end the day higher, but the Dow Jones continues to struggle.
* This morning earnings kick off with the banking sector including JP Morgan, BlackRock and Wells Fargo. All 3 stocks trade higher during pre-trading hours.
* The Euro trades lower against all currencies despite the ECB’s attempt to establish a hawkish tone.

USA100 – The NASDAQ Climbs Higher, But Is the Growth Sustainable?

The NASDAQ was the only index which did not witness a significant decline at the opening of the US session. In addition to this, the USA100 is the only index which is witnessing indications of a bullish market.

The price has crossed onto a higher high breaking the resistance level at $18,269. The index is also trading above the 75-Bar EMA and at the 65.00 level on the RSI which signals buyers are controlling the market. However, a similar large bullish impulse wave was also formed on the 3rd and 5th of the month and was followed by a correction. Therefore, investors need to be cautious of a bearish breakout which may signal a correction back to the 75-bar EMA (18,165). The medium-term growth and its sustainability will depend on the upcoming earnings data.

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Bond yields declined during this morning’s Asian session by 18 points, which is positive for the stock market. However, even with the decline, bond yields remain significantly higher than Monday’s opening yield. This week the 10-year bond yield rose from 4.424 to 4.558, which is a concern. If bond yields again start to rise, the stock market potentially can again become pressured.

25% of the NASDAQ ended the day lower and 75% higher. This gives a clear indication of the sentiment towards the technology sector and reassures traders about the price movement. Another positive was all of the top 12 influential stocks rose in value. Apple, NVIDIA and Broadcom saw the strongest gains, all rising more than 4%.

Producer inflation read slightly lower than expectations, however, the index continues to rise. The Producer Price Index rose from 1.6% to 2.1% and the Core PPI from 2.1% to 2.4%. Therefore, it is not indicating inflation will become easier to tackle in the upcoming months. For this reason, investors should note that inflation and the monetary policy is still a risk and can trigger strong bearish impulse waves.

EURUSD – The Euro Declines Against Major Currencies

The European Central Bank is attempting to concentrate on the positive factors and give no indications of when the committee may opt to cut rates. For example, President Lagarde advises “sales figures” remain stable, but the issue remains they are stably low.

Officials said the decline in prices generally confirms medium-term forecasts and is ensured by a decrease in the cost of food and goods. Most experts continue to believe that the first reduction in interest rates will happen in June, and there may be three or four in total during the year.

Due to this, the Euro is declining against all currencies including the Pound, Yen and Swiss Franc. The US Dollar Index on the other hand trades 0.39% higher and is almost trading at a 23-week high. Due to this momentum, the price of the exchange continues to indicate a decline in favor of the US Dollar.

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Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE  to access the full HFM Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE  to register for FREE!

Click HERE to READ more Market news. 

Michalis Efthymiou
Market Analyst
HMarkets

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
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Date: 15th April 2024.

Market News – Negative Reversion; Safe Havens Rally.

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Economic Indicators & Central Banks:

* Markets weigh risk of retaliation cycle in Middle East. Initially the retaliatory strike from Iran on Israel fostered a haven bid, into bonds, gold and other haven assets, as it threatens a wider regional conflict.
* However, this morning, Oil and Asian equity markets were muted as traders shrugged off fears of a war escalation in the Middle East. Iran said “the matter can be deemed concluded”, and President Joe Biden has called on Israel to exercise restraint following Iran’s drone and missile strike, as part of Washington’s efforts to ease tensions in the Middle East and minimize the likelihood of a widespread regional conflict.
* New US and UK sanctions banned deliveries of Russian supplies, i.e. key industrial metals, produced after midnight on Friday. Aluminum jumped 9.4%, nickel rose 8.8%, suggesting brokers are bracing for major supply chain disruption.

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Financial Markets Performance:

* The USDIndex fell back from highs over 106 to currently 105.70.
* The Yen dip against USD to 153.85.
* USOIL settled lower at 84.50 per barrel and Gold is trading below session highs at currently $2357.92 per ounce.
* Copper, more liquid and driven by the global economy over recent weeks, was more subdued this morning. Currently at $4.3180.

[img]https://s.yimg.com/ny/api/res/1.2/aLWshvKkWUcmd88uZJ5ogA--/YXBwaWQ9aGlnaGxhbmRlcjt3PTk2MDtoPTU0MDtjZj13ZWJw/https://media.zenfs.com/en/bloomberg_markets_842/d86b3b8c9fa1a15147f6e31cb2e433f9[/img]

Market Trends:

* Asian stock markets traded mixed, but European and US futures are slightly higher after a tough session on Friday and yields have picked up.
* Mainland China bourses outperformed overnight, after Beijing offered renewed regulatory support. The PBOC meanwhile left the 1-year MLF rate unchanged, while once again draining funds from the system.
* Nikkei slipped 1% to 39,114.19.
* On Friday, NASDAQ slumped -1.62% to 16,175, unwinding most of Thursday’s 1.68% jump to a new all-time high at 16,442. The S&P500 fell -1.46% and the Dow dropped 1.24%. Declines were broadbased with all 11 sectors of the S&P finishing in the red.
* JPMorgan Chase sank 6.5% despite reporting stronger profit in Q1. The nation’s largest bank gave a forecast for a key source of income this year that fell below Wall Street’s estimate, calling for only modest growth.
* Apple shipments drop by 10% in Q1.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE  to access the full HFM Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE  to register for FREE!

Click HERE to READ more Market news. 

Andria Pichidi
Market Analyst
HFMarkets

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
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Date: 16th April 2024.

Market News – Stocks and currencies sell off; USD up.

[img]https://analysis.hfm.com/wp-content/uploads/2024/04/1270d0ed70cd13ba2457d1ea00d2cd03.webp[/img]
Trading Leveraged Products is risky

Economic Indicators & Central Banks:

* Stocks and currencies sell off, while the US Dollar picks up haven flows.
* Treasuries yields spiked again to fresh 2024 peaks before paring losses into the close, post, the stronger than expected retail sales eliciting a broad sell off in the markets.
* Rates surged as the data pushed rate cut bets further into the future with July now less than a 50-50 chance.
* Wall Street finished with steep declines led by tech. Stocks opened in the green on a relief trade after Israel repulsed the well advertised attack from Iran on Sunday. But equities turned sharply lower and extended last week’s declines amid the rise in yields.
* Investor concerns were intensified as Israel threatened retaliation.
* There’s growing anxiety over earnings even after a big beat from Goldman Sachs.
* UK labor market data was mixed, as the ILO unemployment rate unexpectedly lifted, while wage growth came in higher than anticipated – The data suggests that the labor market is catching up with the recession. Mixed messages then for the BoE.
* China grew by 5.3% in Q1 however the numbers are causing a lot of doubts over sustainability of this growth. The bounce came in the first 2 months of the year. In March, growth in retail sales slumped and industrial output decelerated below forecasts, suggesting challenges on the horizon.
* Today: Germany ZEW, US housing starts & industrial production, Fed Vice Chair Philip Jefferson speech, BOE Bailey speech & IMF outlook.
* Earnings releases: Morgan Stanley and Bank of America.

Financial Markets Performance:

* The US Dollar rallied to 106.19 after testing 106.25, gaining against JPY and rising to 154.23, despite intervention risk. Yen traders started to see the 160 mark as the next Resistance level.
* Gold surged 1.76% to $2386 per ounce amid geopolitical risks and Chinese buying, even as the USD firmed and yields climbed.
* USOIL is flat at $85 per barrel.

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Market Trends:

* Breaks of key technical levels exacerbated the sell off. Tech was the big loser with the NASDAQ plunging -1.79% to 15,885 while the S&P500 dropped -1.20% to 5061, with the Dow sliding -0.65% to 37,735. The S&P had the biggest 2-day sell off since March 2023.
* Nikkei and ASX lost -1.9% and -1.8% respectively, and the Hang Seng is down -2.1%.
* European bourses are down more than -1% and US futures are also in the red.
* CTA selling tsunami: “Just a few points lower CTAs will for the first time this year start selling in size, to add insult to injury, we are breaking major trend-lines in equities and the gamma stabilizer is totally gone.” Short term CTA threshold levels are kicking in big time according to GS. Medium term is 4873 (most important) while the long term level is at 4605.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE  to access the full HFM Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE  to register for FREE!

Click HERE to READ more Market news. 

Andria Pichidi
Market Analyst
HFMarkets

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
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Date: 17th April 2024.

Market News – Appetite for risk-taking remains weak.

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Economic Indicators & Central Banks:

* Stocks, Treasury yields and US Dollar stay firmed.
* Fed Chair Powell added to the recent sell off. His slightly more hawkish tone further priced out chances for any imminent action and the timing of a cut was pushed out further. He suggested if higher inflation does persist, the Fed will hold rates steady “for as long as needed.”
* Implied Fed Fund: There remains no real chance for a move on May 1 and at their intraday highs the June implied funds rate future showed only 5 bps, while July reflected only 10 bps. And a full 25 bps was not priced in until November, with 38 bps in cuts seen for 2024.
* US & EU Economies Diverging: Lagarde says ECB is moving toward rate cuts – if there are no major shocks.
* UK March CPI inflation falls less than expected. Output price inflation has started to nudge higher, despite another decline in input prices. Together with yesterday’s higher than expected wage numbers, the data will add to the arguments of the hawks at the BoE, which remain very reluctant to contemplate rate cuts.
* Canada CPI rose 0.6% in March, double the 0.3% February increase BUT core eased. The doors are still open for a possible cut at the next BoC meeting on June 5.
* IMF revised up its global growth forecast for 2024 with inflation easing, in its new World Economic Outlook. This is consistent with a global soft landing, according to the report.

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Financial Markets Performance:

* USDJPY also inched up to 154.67 on expectations the BoJ will remain accommodative and as the market challenges a perceived 155 red line for MoF intervention.
* USOIL prices slipped -0.15% to $84.20 per barrel.
* Gold rose 0.24% to $2389.11 per ounce, a new record closing high as geopolitical risks overshadowed the impacts of rising rates and the stronger dollar.

Market Trends:

* Wall Street waffled either side of unchanged on the day amid dimming rate cut potential, rising yields, and earnings. The major indexes closed mixed with the Dow up 0.17%, while the S&P500 and NASDAQ lost -0.21% and -0.12%, respectively.
* Asian stock markets mostly corrected again, with Japanese bourses underperforming and the Nikkei down -1.3%. Mainland China bourses were a notable exception and the CSI 300 rallied 1.4%, but the MSCI Asia Pacific index came close to erasing the gains for this year.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE  to access the full HFM Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE  to register for FREE!

Click HERE to READ more Market news. 

Andria Pichidi
Market Analyst
HFMarkets

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
HFblogNews
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Date: 18th April 2024.

Market News – Stock markets benefit from Dollar correction.

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Economic Indicators & Central Banks:

* Technical buying, bargain hunting, and risk aversion helped Treasuries rally and unwind recent losses. Yields dropped from the recent 2024 highs.
* Asian stock markets strengthened, as the US Dollar corrected in the wake of comments from Japan’s currency chief Masato Kanda, who said G7 countries continue to stress that excessive swings and disorderly moves in the foreign exchange market were harmful for economies.
* US Stockpiles expanded to 10-month high. The data overshadowed the impact of geopolitical tensions in the Middle East as traders await Israel’s response to Iran’s unprecedented recent attack.
* President Joe Biden called for higher tariffs on imports of Chinese steel and aluminum.

[img]https://s.yimg.com/ny/api/res/1.2/igvKYnfHswcVZxTPy8x6mg--/YXBwaWQ9aGlnaGxhbmRlcjt3PTk2MDtoPTU0MDtjZj13ZWJw/https://media.zenfs.com/en/bloomberg_technology_68/85aa69f51025a4245b89648d799bc914[/img]

Financial Markets Performance:

* The USDIndex stumbled, falling to 105.66 at the end of the day from the intraday high of 106.48. It lost ground against most of its G10 peers. There wasn’t much on the calendar to provide new direction.
* USDJPY lows retesting the 154 bottom! NOT an intervention yet. BoJ/MoF USDJPY intervention happens when there is more than 100+ pip move in seconds, not 50 pips.
* USOIL slumped by 3% near $82, as US crude inventories rose by 2.7 million barrels last week, hitting the highest level since last June, while gauges of fuel demand declined.
* Gold strengthened as the dollar weakened and bullion is trading at $2378.44 per ounce.

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Market Trends:

* Wall Street closed in the red after opening with small corrective gains. The NASDAQ underperformed, slumping -1.15%, with the S&P500 -0.58% lower, while the Dow lost -0.12.
* The Nikkei closed 0.2% higher, the Hang Seng gained more than 1.
* European and US futures are finding buyers.
* A gauge of global chip stocks and AI bellwether Nvidia Corp. have both fallen into a technical correction.
* The TMSC reported its first profit rise in a year, after strong AI demand revived growth at the world’s biggest contract chipmaker. The main chipmaker to Apple Inc. and Nvidia Corp. recorded a 9% rise in net income, beating estimates.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE  to access the full HFM Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE  to register for FREE!

Click HERE to READ more Market news. 

Andria Pichidi
Market Analyst
HFMarkets

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
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Date: 19th April 2024.

Weekly Commodity Market Update: Oil Prices Correct and Supply Concerns Persist.

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The ongoing developments in the Middle East sparked a wave of risk aversion and fueled supply concerns and investors headed for safety. Hopes for imminent rate cuts from the Federal Reserve diminish while attention is now turning towards the demand outlook.

The Gold price hit a high of $2417.89 per ounce overnight. Sentiment has already calmed down again and bullion is trading at $2376.50 per ounce as haven flows ease. Oil prices initially moved higher as concern over escalating tensions with the WTI contract hit a session high of $85.508 per barrel overnight, before correcting to currently $81.45 per barrel.

Oil Prices Under Pressure Amid Middle East Tensions

Last week, commodity indexes showed little movement, with Oil prices undergoing a slight correction. Meanwhile, Gold reached yet another record high, mirroring the upward trend in cocoa prices.

Once again today, USOil prices experienced a correction and has remained under pressure, retesting the 50-day EMA at $81.00 as we moving into the weekend. Hence, despite the Israel’s retaliatory strike on Iran, sentiments stabilized following reports suggesting a measured response aimed at avoiding further escalation. Brent crude futures witnessed a more than 4% leap, driven by concerns over potential disruptions to oil supplies in the Middle East, only to subsequently erase all gains. Similarly with USOIL, UKOIL hovers just below $87 per barrel, marginally below Thursday’s closing figures.

Nevertheless, volatility is expected to continue in the market as several potential risks loom:

* Disruption to the Strait of Hormuz: The possibility of Iran disrupting navigation through the vital shipping lane, is still in play. The Strait of Hormuz serves as the Persian Gulf’s primary route to international waters, with approximately 21 million barrels of oil passing through daily. Recent events, including Iran’s seizure of an Israel-linked container ship, underscore the geopolitical sensitivity of the region.

* Tougher Sanctions on Iran: Analysts speculate that the US may impose stricter sanctions on Iranian oil exports or intensify enforcement of existing restrictions. With global oil consumption reaching 102 million barrels per day, Iran’s production of 3.3 million barrels remains significant. Recent actions targeting Venezuelan oil highlight the potential for increased pressure on Iranian exports.

* OPEC Output Increases: Despite the desire for higher prices, OPEC members such as Saudi Arabia and Russia have constrained output in recent years. However, sustained crude prices above $100 per barrel could prompt concerns about demand and incentivize increased production. The OPEC may opt to boost oil output should tensions escalate further and prices surge.

* Ukraine Conflict: Amidst the focus on the Middle East, markets overlooking Russia’s actions in Ukraine. Potential retaliatory strikes by Kyiv on Russian oil infrastructure could impact exports, adding further complexity to global oil markets.

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Technical Analysis

USOIL is marking one of the steepest weekly declines witnessed this year after a brief period of consolidation. The breach below the pivotal support level of 84.00, coupled with the descent below the mid of the 4-month upchannel, signals a possible shift in market sentiment towards a bearish trend reversal.

Adding to the bearish outlook are indications such as the downward slope in the RSI. However, the asset still hold above the 50-day EMA which coincides also with the mid of last year’s downleg, with key support zone at $80.00-$81.00. If it breaks this support zone, the focus may shift towards the 200-day EMA and 38.2% Fib. level at $77.60-$79.00.

Conversely, a rejection of the $81 level and an upside potential could see the price returning back to $84.00. A break of the latter could trigger the attention back to the December’s resistance, situated around $86.60. A breakthrough above this level could ignite a stronger rally towards the $89.20-$90.00 zone.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE  to access the full HFM Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE  to register for FREE!

Click HERE to READ more Market news. 

Michalis Efthymiou
Market Analyst
HMarkets

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
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Date: 22nd April 2024.

The NASDAQ Gains As Earnings Gain Momentum, But More Bad News For Tesla.

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Economic Indicators & Central Banks:

* Investors turn their attention to the “magnificent seven” and earnings reports as the countdown begins.
* The NASDAQ and most global indices trade higher on Monday with the NASDAQ leading gains. Investors concentrating on earnings from Meta, Microsoft, Alphabet and Tesla.
* Tesla announces it will slash its prices once again as sales decline. The stock trades almost 41% lower in 2024.
* The Euro gains momentum as the European Cash Open nears and is the best performing G7 currency of the day so far.

USA100 – Earnings Season Gains Momentum, More Bad News for Tesla

Last week the NASDAQ’s decline marked the worst week since November 2022, but the price trades higher on Monday. Currently the NASDAQ is the best performing global index, but its performance will largely be dependent on earnings.

So far, technical analysis is still indicating a downward trend and continues to form higher lows as well as highs. The asset also continues to trade lower than the main trend lines, Moving Averages and in the “sell” zone of the RSI. Based on the past 3 retracements, the average retracement size is 1.41%, which means similar retracements could see the price rise a further 0.42%. If the price rises above this level or above $17,234 (Fibonacci retracement 60.0 level), the possibility of a correction or new trend rises.

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The question for investors is if the market will take advantage of the lower price to better their entry. This will depend on the upcoming earnings data. This week’s most influential reports for the NASDAQ are:

* Tesla – Tuesday After Market Close
* Meta – Wednesday After Market Close
* Microsoft – Thursday After Market Close
* Alphabet – Thursday After Market Close

The most influential reports will be Microsoft and Alphabet which have the highest “weights” within the index. Tesla on the other hand continues to worry shareholders and CEO Musk cancelled a trip to India over the weekend due to an urgent meeting at Tesla. The company advised they would reduce their workforce by 10% and cut the prices of certain products. Tesla is the NASDAQ’s ninth most influential stock. If earnings and revenue fall short of already subdued expectations, there is a strong chance for the stock price to potentially further decline.

For this reason, the performance of the price movement is likely to depend more on the above upcoming earnings data. If earnings are better than expectations, the index may attempt a correction. Otherwise, investors may see little reason to further expose to that market. If the price drops below $17,102.03, the price action would continue to follow the bearish trend pattern.

EURUSD – Reverting Price Conditions

The Euro is one of the better performing currencies of the day so far, but investors remain concerned about the ECB’s monetary policy. The exchange rate continues to follow a reverting price pattern with the average price at 1.06441. The price currently maintains a “neutral” signal as the price trades at the 75-Bar EMA and slightly above 50.00 on the RSI.

The main price drivers for the Euro over the next 24 hours will be the ECB President’s Speech this evening and tomorrow’s PMI indexes. If President Lagarde continues to advise the Eurozone is close to adjusting interest rates, the currency could come under pressure once more. Also investors will monitor tomorrow’s PMI indexes for the services and manufacturing sector. If the data reads lower than expectations, the Euro again could come under pressure with short term targets at 1.06088.

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Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE  to access the full HFM Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE  to register for FREE!

Click HERE to READ more Market news. 

Michalis Efthymiou
Market Analyst
HFMarkets

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
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Date: 23rd April 2024.

European PMIs Paint Mixed Picture, ECB advise a June Cut is Certain.

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Economic Indicators & Central Banks:

* The German DAX recorded its highest monthly increase as investors continue to predict a weaker EU monetary policy.
* JP Morgan again advised stocks are overcrowded and may see a stronger downward correction. However, economists advise this is only possible if geo-political tension escalates or companies fail to beat earnings predictions.
* Gold witnesses its strongest decline in 2024 falling 2.64% on Monday and a further 1.32% during this morning’s Asian session.
* The Euro is the best performing currency after the day’s PMI releases. However, investors should note that the US Dollar during the Asian session was performing significantly better.

USA500 – Visa and Tesla Ready Shareholders For Earnings Release!

The SNP500 rose 0.87% during the US trading session and also broke the previous swing high. However, JP Morgan again told journalists there are signs that the stock market is “overcrowded”. When institutions are overexposed to certain stocks or industries, it only takes one big fund to start de-levering and then others will follow.

Though, investors should note that this would also depend on three factors. The first is earnings, the second is geo-political tensions and the third is inflation. This week, investors will largely watch earnings, particularly Visa and Tesla. Visa and Tesla currently hold a weight of 2.00% and are two of the most influential stocks. Tesla continues to be one of the worst performing stocks, but Visa’s earnings are less certain.

Visa has beat earnings and revenue expectations over the past 4 occasions but has been struggling over the past 30 days. Analysts expect earnings and revenue to remain at the same level compared to the previous quarter. However, higher earnings can potentially increase demand. Visa stocks have risen 5.20% in 2024 and have a dividend yield of 0.76%.

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However, as mentioned above, the performance of the stock market will largely depend also on inflation and geo-political tensions. Though these are not likely to change within the upcoming days. In regard to inflation, investors will be eager to see if inflation again rises, in which case, interest rate cuts will likely not be possible for 2024. If this scenario materialises, stocks can decline between 20-30% ($3,700-$4,220).

GER30 – ECB Ready To Cut Rates In June 2024!

On a 2-hour timeframe the price of the GER30 is trading above the 75-Bar EMA and above the VWAP. In addition to this, the asset is obtaining buy signals also from oscillators and price action. The index has retraced since the release of the European PMI data, but if the price rises above 18,067, without breaking the day’s low price, buy signals will become active.

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One of the key drivers, along with this morning’s PMI release for Germany and France, is the latest comments from members of the ECB. According to ECB representative Mr Villeroy, even if oil remains volatile, the regulator will look to cut in June 2024. In addition to Mr Villeroy, Mr De Guindos told journalists that a rate cut in June is “crystal clear”. The guidance given is increasing the demand for the German DAX as are indications of stronger economic data.

The French PMI data saw the Services index rise above 50.00 for the first time since May 2023 and beat expectations. However, the manufacturing index continues to struggle and fell compared to the previous month. The German PMI was a similar picture. The Services PMI rose to a 10-month high and beat expectations, but the Manufacturing Index read lower than the 42.8 expectations and is at a 6-month low.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE  to access the full HFM Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE  to register for FREE!

Click HERE to READ more Market news. 

Michalis Efthymiou
Market Analyst
HFMarkets

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
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Date: 24th April 2024.

Market News – Stock markets strengthen as tech rally widens.

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Economic Indicators & Central Banks:

* The bulls are back in town for now. Wall Street climbed, led by tech and especially the Magnificent 7 — all cohorts rallied, even Tesla which broke a 7-session losing streak even as its earnings news was awaited.
* US: The weaker than expected PMI data from S&P Global was the excuse needed to underpin a short covering rally in Treasuries after the big selloff in April.
* Record US Auction boosted demand! A well bid 2-year sale also added to the gains in Treasuries, while signs of future price pressures saw the long end underperform. Demand petered out into the finish, however, especially with the surge on Wall Street, and yields edged off their lows.
* Australia: The hot inflation print pointed to sticky local price pressures and reinforced the case for the RBA to hold rates at a 12-year high. The CPI rose to 3.6% y/y VS 3.5% estimate, while core CPI rose 4%, also higher than forecast and well above the RBA’s 2-3% target.
* Japan: Strong warning for intervention by officials. The BoJ is widely expected on Friday to leave policy settings & bond purchase amounts unchanged.
* NEW YORK (AP) — The Biden administration has finalized a new rule set to make millions more salaried workers eligible for overtime pay in the US.

[img]https://media.zenfs.com/en/bloomberg_markets_842/5d20a181b2b6da78327412f3fa88db87[/img]

Financial Markets Performance:

* The USDIndex slumped, falling to 105.39 largely on profit taking and as haven demand faded.
* USDJPY flirts with 155 after FM Suzuki issued the strongest warning to date on the chance of intervention, saying last week’s meeting with US and South Korean counterparts had laid the groundwork for Tokyo to act against excessive Yen moves.
* AUDUSD up for a 3rd day in a row, to 0.6528 amid a broadly weaker USD but also a strong Aussie post a hot inflation print.
* USOIL steady at $83 ahead of sanctions against Iran and shrinking US Inventories.
* Gold closed slightly lower at $2332, but off yesterday’s $2289 nadir.

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Market Trends:

* The NASDAQ increased 1.59%, with the S&P500 up 1.20%, while the Dow rallied 0.69%. Dissipating geopolitical risks also supported.
* EU stock futures are posting gains, after a largely stronger close across Asia. Nikkei and Hang Seng gained more than 2% amid a strengthening tech rally. Australian shares underperformed.
* Tesla Inc. (+13.33% after hours) spiked after its statement for the launch of more affordable vehicles despite a sales miss. The stock halted a 7-day plunge, climbing alongside other members of the group.
* Microsoft Corp., Meta Platforms Inc. and Alphabet Inc. are also due to report earnings this week. Profits for the “Magnificent Seven” group — which also includes Apple Inc., Amazon.com Inc. and Nvidia Corp. — are forecast to rise about 40% in the Q1 a year ago, according to Bloomberg Intelligence data. The group of tech megacaps is crucial to the S&P 500 since the companies carry the heaviest weightings in the benchmark.
* Visa revenue advanced by 17% as Consumer Card spending increased.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE  to access the full HFM Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE  to register for FREE!

Click HERE to READ more Market news. 

Andria Pichidi
Market Analyst
HFMarkets

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
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Date: 25th April 2024.

Investors Monitor a Potential Japanese Intervention, and upcoming Tech Earnings.

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* Meta stocks top earnings expectations, but revenue guidance for the next 6 months triggers significant selloff. Meta stocks decline 15.00% and the Magnificent Seven also trade lower.
* Japanese Authorities are on watch and most market experts predict the Japanese Federal Government will intervene once again.
* The Japanese Yen is the day’s worst performing currency while the Australian Dollar continues to top the charts.
* The US Dollar trades 0.10% lower, but this afternoon’s performance is likely to be dependent on the US GDP.

USA100 – Meta Stocks Fall 15% On the Next 6-Months Guidance

The NASDAQ has declined 1.51% over the past 24 hours, unable to maintain momentum from Monday and Tuesday. Technical analysts advise the decline is partially simply a break in the bullish momentum and the asset continues to follow a bullish correction pattern. However, if the decline continues throughout the day, the retracement scenario becomes a lesser possibility.

In terms of indications and technical analysis, most oscillators, and momentum-based signals point to a downward price movement. The USA100 trades below the 75-Bar EMA, below the VWAP and the RSI hovers above 40.00. All these factors point towards a bearish trend. The bearish signals are also likely to strengthen if the price declines below $17,295.11.

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The stock which is experiencing considerably large volatility is Meta which has fallen more than 15.00%. The past quarter’s earnings beat expectations and according to economists, remain stable and strong. Earnings Per Share beat expectations by 8.10% and revenue was as expected. However, company expenses significantly rose in the past quarter and the guidance for the second half of the year is lower than previous expectations. These two factors have caused investors to consider selling their shares and cashing in their profits.

Meta’s decline is one of the main causes for the USA100’s bearish trend. CFRA Senior Analyst, Angelo Zino, advises the selloff may be a slight over reaction based on earnings data. If Meta stocks rise again, investors can start to evaluate a possible upward correction. However, a concern for investors is that more and more companies are indicating caution for the second half of the year.

The price movements will largely now depend on Microsoft and Alphabet earnings tonight after market close. Microsoft is the most influential stock for the NASDAQ and Alphabet is the third. The two make up 14.25% of the overall index. If the two companies also witness their stocks decline after the earnings reports, the USA100 may struggle to gain upward momentum.

EURJPY – Will Japan Intervene Again?

In the currency market, the Japanese Yen remains within the spotlight as investors believe the Japanese Federal Government is likely to again intervene. The Federal Government has previously intervened in the past 12 months which caused a sharp rise in the Yen before again declining. The government opted for this option in an attempt to hinder a further decline.

Volatility within the Japanese Yen will also depend on today’s US GDP reading and tomorrow’s Core PCE Price Index. However, investors will more importantly pay close attention to the Bank of Japan’s monetary policy. Investors will be keen to see if the central bank believes it is appropriate to again hike in 2024 as well as comment regarding inflation and the economy.

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In terms of technical analysis, breakout levels can be considered as areas where the exchange rate may retrace or correct. Breakout levels can be seen at 166.656 and 166.333. However, the only indicators pointing to a decline are the RSI and similar oscillators which advise the price is at risk of being “overbought”.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE  to access the full HFM Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE  to register for FREE!

Click HERE to READ more Market news. 

Michalis Efthymiou
Market Analyst
HFMarkets

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
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Date: 26th April 2024.

Alphabet Easily Beat Earnings Predictions But Focus Shifts to Today’s PCE Data.

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* Microsoft and Alphabet’s earnings reports beat expectations pushing the NASDAQ to the top of the charts.
* The Bank of Japan keep interest rates unchanged applying pressure on the Japanese Yen. The Yen Index declines 0.36% and is down 40% against the USD over the past 5 years.
* The US GDP growth rate falls below its 2.5% expectations, reading 1.6%, but economists advise the Fed may only cut once in 2024!
* The market turns its attention to the Core PCE Price Index which analysts expect to fall from 2.8% to 2.6%.

USA100 – Alphabet Easily Beat Analysts’ Earnings Predictions and Sees its P/E Ratio Fall!

The price of the NASDAQ ended the day higher and rose to a slightly higher high. As a result, the index is close to forming a traditional bullish trend and making Wednesday’s decline a retracement or medium-term correction. In terms technical analysis, indicators are mainly indicating a reverting price condition where the asset cannot maintain longer term momentum. However, momentum indications provide a slight bullish bias.

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The upward price movement is being driven by earnings reports from Microsoft and Alphabet which beat earnings expectations. Microsoft is the most influential stock for the NASDAQ while Alphabet is the third most influential. Alphabet’s earnings beat expectations by 21.61% and revenue rose more than $6 billion. As a result, the price of the stock rose 11.56% after market close.

Furthermore, Microsoft’s Earnings Per Share beat Wall Street’s expectations by 3.40% and revenue by 1.50%. The stock rose by 4.30% after market close and is close to trading at the all-time high. However, investors should note that from the “magnificent 7”, Alphabet and Meta have the lowest Price to Earnings ratio. Meaning these stocks are the most likely to be trading below their intrinsic value.

However, investors should note that negatives for the stock market in general remain. This also supports the bias shown by technical analysis. The GDP growth rate fell considerably below expectations while inflation data continues to show signs of rising prices. Investors will closely be monitoring today’s Core PCE Price Index which is the most watched index by the Federal Reserve. Analysts expect the Core PCE Price Index to fall from 2.8% to 2.6%. If the index reads more than 0.3%, a rate cut will become unlikely making stocks less attractive.

Whereas, if the PCE Price Index is not as high as expectations, Bond Yields will likely decline, as will the US Dollar and a rate cut will be put back on the table. As a result, investors may look to take advantage of the strong earnings and continue purchasing stocks.

USDJPY – BOJ Hold Interest Rates Unchanged!

The price of the USDJPY exchange rate again rose to an all-time recent high after increasing in value for 3 consecutive days. Trend and momentum-based indicators point towards a higher price. However, the exchange rate is trading within the overbought range of most oscillators and is also showing a divergence pattern. Both are known to indicate a decline, but not necessarily a complete change of trend.

The Bank of Japan’s statement from earlier this morning was largely “dovish” and gave no clear indication that the central bank wishes to keep rising interest rates. However, shortly the Governor will answer questions from journalists and may give a more hawkish tone. Either way, investors are mainly concentrating on if the Federal Government will again opt to intervene within the currency market. Most economists believe the intervention will only come if the USD continues to rise and it will not be before the Core PCE Price Index.

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Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE  to access the full HFM Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE  to register for FREE!

Click HERE to READ more Market news. 

Michalis Efthymiou
Market Analyst
HFMarkets

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
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Date: 29th April 2024.

Market News – Yen spikes after drifting to 1990’s levels.

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Economic Indicators & Central Banks:

* The Yen recovered sharply following a plunge to its lowest level in 34 years (USDJPY above 160 for the first time since 1990), prompting speculation of potential intervention by authorities. – The volatility was attributed in part to thin liquidity due to a public holiday in Japan.
* Japan’s Kanda Said: ‘No Comment for Now’ when asked if intervened.
Note: Japan is closed for holidays – Showa Day
* European and US stock futures climbed, mirroring a positive trend in Asian markets.
* China industrial profit growth slowed sharply. Data will add to concerns that the government is struggling to maintain growth momentum.
* Chinese stocks led the rally in Asia, supported by increased foreign investment and improved earnings. Property shares surged following positive developments, including major developer CIFI Holdings Group Co. resolving liquidity issues with bondholders.
* US Treasury returns have declined by 2.3% this month – largest monthly drop since February 2023. Market sentiment now suggests only one Fed rate reduction for 2024.
* Geopolitics: US Secretary of State Antony Blinken is engaged in efforts to broker a ceasefire in Gaza during meetings in the Middle East today.

Financial Markets Performance:

* USDJPY hit a session high of 160.17 before the sharp bounce in the Yen, not just against the Dollar. Markets saw the bounce as sign of possible government intervention, with Japanese banks reportedly dumping dollars aggressively. USDJPY fell as low at 155.06, but has already inched up to 157.02.
* The USDIndex fell back to 105.30 across all of its G7 peers.
* USOIL steady at $82-60-83.00 per barrel and Gold is also consolidating at $2330 per ounce.

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Market Trends:

* Stock markets rallied overnight, with the Nikkei gaining 0.8% as the Yen rallied amid intervention speculation. The Hang Seng jumped 0.98%, the CSI 300 lifted 1.3%.
* The S&P500 rallied 1% to finish its first winning week in the last four. The Dow rose 153 points, or 0.4%, and the Nasdaq composite jumped 2%.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE  to access the full HFM Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE  to register for FREE!

Click HERE to READ more Market news. 

Andria Pichidi
Market Analyst
HFMarkets

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
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Market News – Cautiousness ahead of Fed, NFP & Earnings.

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Economic Indicators & Central Banks:

* Trading remains quiet in a very busy week of data, earnings, supply, NFP and the Fed.
* Treasury yields and Wall Street posted small gains on the day but overall reain steady. It looks like fatigue has set in for the bears after knocking bonds and stocks sharply lower on the month.
* European equity futures are also steady, while the USD rose slightly against the G7 amid speculation the Fed may take a more hawkish tone when announcing its policy decision on Wednesday.
* German retail sales bounced 1.8% m/m in March. Sales were still down -2.7% y/y, but the rebound at the end of the first quarter is encouraging and suggests that higher wages and lower inflation are boosting consumption trends.
* German import price inflation was higher than expected. With the Euro lower against the Dollar, import price inflation is set to continue to nudge higher.
* French GDP expanded 0.2% q/q in the Q1 of the year.
* Japan’s unemployment unexpectedly was at 2.6% in March 2024, the same pace as in the prior month.

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Financial Markets Performance:

* The USDIndex recovered slightly but holds below 105.90.
* After the assumed MoF intervention to support the Yen USDJPY was knocked down to an intraday low of 154.54 from a new 34-year high of 160.17.
* Soft Commodities: Top losers are Cocoa (-11.15%) and Wheat (-9.84%). Gains are led by Sugar (3.74%), Cotton (1.57%) and Rapeseed (1.25%).
* Metals: Top gainers are Platinum (3.70%) and Copper (2.12%). Biggest losers are Steel Rebar (-0.81%) and Silver (-0.50%). In addition, there was a slight change on Gold (-0.14%).
* Energies: Top commodity gainers are Natural gas (6.78%). Biggest losers are Natural Gas UK GBP (-4.89%), Natural Gas EU Dutch TTF (-3.85%) and Crude Oil WTI (-1.22%). In addition, there was a slight change on Brent Crude Oil (-1.09%).

Market Trends:

* Stocks were modestly higher with gains of 0.39% on the Dow, with the S&P500 and NASDAQ advancing 0.32% and 0.35%, respectively.
* Tesla rallied as much as 15% after receiving the green light for full self-driving technology in China, while Trump Media jumped 12% to boost gains on Wall Street.
* Earnings releases this week from the biggest US players include Amazon, McDonald’s, Apple and Coca-Cola. Meanwhile, Paramount is expected to post its earnings after today’s close.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE  to access the full HFM Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE  to register for FREE!

Click HERE to READ more Market news. 

Andria Pichidi
Market Analyst
HFMarkets

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
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Understanding the Implications of the FOMC Meeting.

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The FOMC will issue its post-meeting statement at 18:00 GMT tonight. “High-for-longer” is the expected outcome (but not higher) given more indications that progress on bringing inflation sustainably down to the 2% target has stalled out. With no new quarterly forecasts, it will be all about Chair Powell’s press conference when the Fed announces its policy stance tonight.

The major question at this point will be how hawkish will he be?

It is unlikely to be any more hawkish than what the markets are pricing in. Indeed, Chair Powell will have to acknowledge that the data are going the wrong way and he may even pre-empt the likely first question out of the box, “is a rate hike in the cards?”

Meanwhile, Fed funds futures have not only fully priced out chances for a rate cut for this meeting and for June, but July as well. Risk for a reduction in September fell to below 50-50 on the initial spike in implied rates on the ECI news. The November contract reflects 20 bps in cuts, with a full quarter point easing now not seen until December. The FOMC is also expected to announce a slowing in Treasury runoff for June.

Economic Projections & Market Interpretation:

The March update of the SEP revealed notable adjustments in key economic indicators. GDP forecasts for 2024 experienced a substantial upward revision, reflecting a more optimistic outlook with a growth rate of 2.1%, up from 1.4% in December. Similarly, projections for 2025 saw improvements, with the median jobless rate forecasts showing mixed trends but generally aligning with recent patterns. Expectations for headline and core PCE chain price indices also witnessed slight adjustments, indicating potential shifts in inflation dynamics.

During the March meeting, the “dot plot” estimates hinted at a dovish stance by Fed members, with no indications of further rate hikes and median estimates suggesting potential rate cuts in 2024. This interpretation led markets to anticipate the initiation of quarterly rate cuts starting in June. As investors await the June SEP update, there is speculation about further adjustments in GDP estimates, PCE chain price indices, and the potential revision of rate cut expectations.

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Analyzing the labor market reveals a complex picture of recovery and ongoing challenges. Payrolls have shown resilience in 2024, surpassing the previous year’s averages, albeit with variations across sectors. Despite improvements, the jobless rate remains a focal point, with fluctuations reflecting broader economic conditions. Additionally, metrics like the U-6 rate and wage growth provide insights into the labor market’s health and potential inflationary pressures.

Inflation Trends and Consumption Patterns:

Inflation dynamics have been closely monitored, particularly amid recent fluctuations in commodity prices and supply chain disruptions. While recent CPI and PCE chain price measures suggest some moderation in inflationary pressures, concerns linger about the sustainability of these trends. The Fed’s attention to inflation remains paramount, shaping expectations for future policy actions.

Consumer spending, a key driver of economic growth, has exhibited resilience despite ongoing uncertainties. Real personal consumption expenditures (PCE) have maintained positive growth rates, contributing to overall GDP expansion. However, shifts in consumption patterns and potential impacts on future economic performance warrant careful observation.

Market Expectations and Implications:

As the FOMC meeting approaches, market participants are closely monitoring economic indicators and policy developments for insights into future market dynamics. The verbiage of the Fed statement and subsequent press briefing will be scrutinized for any hints regarding the timing of potential policy adjustments. Investors should remain vigilant and adaptable, considering the evolving economic landscape and its implications for investment strategies.

The upcoming FOMC meeting holds significant implications for investors and economic stakeholders. Understanding recent economic developments, market expectations, and potential policy shifts is essential for navigating the dynamic financial environment. By staying informed and proactive, investors can position themselves to capitalize on emerging opportunities while managing risks effectively.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE  to access the full HFM Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE  to register for FREE!

Click HERE to READ more Market news. 

Andria Pichidi
Market Analyst
HFMarkets

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
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Market News – Stocks mixed; Yen support still on; Eyes on NFP & Apple tonight.

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Economic Indicators & Central Banks:

*As the Fed maintained a “high-for-longer” stance, stocks gave up their gains with attention turning back to earnings.
*Chair Powell and the Fed were not as hawkish as feared and the markets reacted immediately and in textbook fashion to the still dovish policy stance.
*The Fed flagged that recent disappointing inflation readings could make rate cuts a while in coming, but Fed chief Jerome Powell characterized the risk of more hikes as “unlikely,” giving some solace to markets.
*Stocks traded mixed across Asia, while in Europe, DAX and FTSE futures are finding buyers and US futures are also in demand, after the Fed’s message.
*Yen: Another suspected intervention by authorities, this time in late New York trading, ran into resistance from traders keen to keep selling the currency.
*Swiss CPI lifted to 1.4% y/y in April from 1.0% y/y in the previous month. Headline numbers are still at low levels and base effects play a role, with the different timing of Easter this year also likely to distort the picture. That said, the numbers may not question the SNB’s decision to cut rates, but they do not support another rate cut in June.

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Financial Markets Performance:

*The USDIndex has corrected to 105.58, but USDJPY is already inching higher again, after a sharp drop to a low of 153.04 on Tuesday that sparked fresh intervention speculation. The pair is currently trading at 155.38.
*Treasury yields plunged and were down over double digits before profit taking set in.
USOIL finished with a -3.6% loss to $79.00, the lowest since March 12. Currently it is as $79.53.
*Gold was up 1.4% to $2319.55 per ounce, reclaiming the $2300 level.

Market Trends:

*Wall Street climbed initially with gains of 1.4% on the NASDAQ, 1.2% on the Dow, and 0.96% on the S&P500. The NASDAQ and S&P500 closed with losses of -0.3%, while the Dow was 0.23% firmer.
*The Hang Seng rallied more than 2%, and the ASX also posting slight gains, while CSI 300 and Nikkei declined.
*Apple’s earnings report is due after the US market closes today, will give investors a better sense of how the iPhone maker is weathering a sales slump, due in part to a sluggish China market.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE  to access the full HFM Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE  to register for FREE!

Click HERE to READ more Market news. 

Andria Pichidi
Market Analyst
HFMarkets

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
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Dow Jones Close To 1-Month High, Eyes on Disney Earnings.

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*The stock market trades at a 3-week high after significant support from the latest earning reports and US employment data.
*Economists continue to expect a rate cut no earlier than September 2024 despite the US unemployment rate rising to 3.9%.
*The US Dollar Index trades higher on Tuesday and fully corrects the decline from NFP Friday.
*Dow Jones investors wait for Disney to release their latest quarterly earnings data. The stock holds a weight of 1.93%.

USDJPY – The US Dollar Regains Lost Ground

The USDJPY is an interesting pair on Tuesday as the US Dollar is the best performing currency within the market while the Yen is witnessing the strongest decline. Investors will continue to monitor as we enter the European Cash Open to ensure no significant changes. The exchange rate has been declining since the 29th of April when the Japanese Government is believed to have intervened and strengthened the Yen. However, the US Dollar has been gaining over the past 24 hours. During this morning’s Asian Session, the exchange rate trades 0.44% higher.

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Currently the only concern for the US Dollar is the latest employment data which illustrates a potential slowing employment sector. However, investors are quick to point out that this cannot be known simply from 1 weak month. This is the first time the NFP data read lower since November 2023. No major data is in the calendar for the next two days which can influence the US Dollar. Despite the weaker employment data and lower wage growth, investors continue to predict a rate cut no earlier than September 2024. This is something which can also be seen on the CME FedWatch Tool, which shows a 34.3% chance of rates remaining unchanged in September.

In regard to the Japanese Yen, most analysts expect the next rate increase in the second half of this year depending on a stable movement of inflation. In addition, investors are monitoring the actions of financial authorities, expecting new currency interventions from them against a weakening Yen. This is the main concern for investors speculating against the Yen. However, economists continue to advise the Yen will struggle to gain even with a small rate hike, unless the rest of the financial world starts cutting rates.

USA30 – Investors Turn To Disney Earnings Data!

The Dow Jones is close to trading at a 1-month high and is also trading slightly higher this morning. The index recently has been supported by the latest employment data which indicates a higher possibility of rate cuts by the Fed. Today investors focus on the quarterly earnings report for Disney.

Disney stocks are trading 0.37% higher during this morning’s pre-trading hours indicating investors believe the report will be positive. So far this year the stock is trading 28.40% higher and is one of the better performing stocks. Yesterday, the stock rose by 2.47% but remains significantly lower than its all-time high of $197. Currently analysts believe the earnings data will either be similar to the previous quarter or slightly lower. If earnings and revenue read higher, the stock is likely to continue rising. The stock is the 22nd most influential stock for the Dow Jones and will only influence the USA30 and USA500, not the USA100.

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Currently, technical analysis continues to indicate a strong price sentiment. The price trades above the 75-bar EMA and above the VWAP. In addition to this, the RSI is trading at 68.11 which also signals buyers are controlling the market. The only concern for traders is retracements. A weaker retracement could decline to $38,703, whereas a stronger retracement can fall back to $38,571.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE  to access the full HFM Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE  to register for FREE!

Click HERE to READ more Market news. 

Michalis Efthymiou
Market Analyst
HFMarkets

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
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Market News – Stocks mixed; Yen support still on; Eyes on NFP & Apple tonight

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Economic Indicators & Central Banks:

* As the Fed maintained a “high-for-longer” stance, stocks gave up their gains with attention turning back to earnings.
* Chair Powell and the Fed were not as hawkish as feared and the markets reacted immediately and in textbook fashion to the still dovish policy stance.
* The Fed flagged that recent disappointing inflation readings could make rate cuts a while in coming, but Fed chief Jerome Powell characterized the risk of more hikes as “unlikely,” giving some solace to markets.
* Stocks traded mixed across Asia, while in Europe, DAX and FTSE futures are finding buyers and US futures are also in demand, after the Fed’s message.
* Yen: Another suspected intervention by authorities, this time in late New York trading, ran into resistance from traders keen to keep selling the currency.
* Swiss CPI lifted to 1.4% y/y in April from 1.0% y/y in the previous month. Headline numbers are still at low levels and base effects play a role, with the different timing of Easter this year also likely to distort the picture. That said, the numbers may not question the SNB’s decision to cut rates, but they do not support another rate cut in June.

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Financial Markets Performance:

* The USDIndex has corrected to 105.58, but USDJPY is already inching higher again, after a sharp drop to a low of 153.04 on Tuesday that sparked fresh intervention speculation. The pair is currently trading at 155.38.
* Treasury yields plunged and were down over double digits before profit taking set in.
* USOIL finished with a -3.6% loss to $79.00, the lowest since March 12. Currently it is as $79.53.
* Gold was up 1.4% to $2319.55 per ounce, reclaiming the $2300 level.

Market Trends:

* Wall Street climbed initially with gains of 1.4% on the NASDAQ, 1.2% on the Dow, and 0.96% on the S&P500. The NASDAQ and S&P500 closed with losses of -0.3%, while the Dow was 0.23% firmer.
* The Hang Seng rallied more than 2%, and the ASX also posting slight gains, while CSI 300 and Nikkei declined.
* Apple’s earnings report is due after the US market closes today, will give investors a better sense of how the iPhone maker is weathering a sales slump, due in part to a sluggish China market.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE  to access the full HFM Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE  to register for FREE!

Click HERE to READ more Market news. 

Andria Pichidi
Market Analyst
HMarkets

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
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Market Insights: The BOE’s Potential Dovish Pivot and Current Indications.

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*The Bank of England is in focus as the regulator will confirm their rate decision and how their future monetary policy path may look.
*The GBP trades sideways but the FTSE100 continues to trade higher. Economists are contemplating if the market is pricing a dovish tilt by the BOE.
*The Dow Jones was Wednesday’s best performing index, rising 0.48%. The DJIA’s best performing stock was Amgen which rose 2.33%.
*Federal Reserve members continue to apply further pressure on the market’s sentiment with more indications that inflation is too high.

GBPUSD – Investors Focusing on A Potential Upcoming Dovish Pivot!

The GBPUSD trades sideways and did not form a significant trend the day before. This morning the price trades slightly in favour of the US Dollar, however most institutions are waiting for confirmation from the Bank of England on monetary policy adjustment. The price movement will depend on the future guidance of the Governor and the Monetary Policy Committee’s votes.

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The market is expecting the interest rate to remain at 5.25%. However, there’s anticipation that regulators may hint at upcoming monetary policy easing, potentially impacting the Pound. Analysts anticipate a shift to a “dovish” policy this year but differ on timing. Most foresee changes in June or August, possibly with two 25-point rate cuts. The price of the GBP will depend on when the BOE will indicate a rate cut is likely. If 1 or 2 members of the MPC vote for a cut and the Governor advises they are now considering a cut, then the GBP potentially could decline based on a June rate cut.

Market participants are anticipating a dovish indication due to inflation declining for 3 consecutive months and declining to a 32-month low. In addition to this, the UK’s employment change has weakened for 2 consecutive months as has the UK GDP growth. Traders can see the market is pricing a dovish indication due to the GBP’s decline over the past 3 days as well as the bullish price movement seen on the FTSE100.

USA30 – When Will The Buy Signal Again Become Active?

The Dow Jones was the best-performing US index as investors increased their exposure due to its connection with defensive stocks. 70% of the Dow Jones’ components rose in value and the best performing stocks were Amgen, Boeing and JP Morgan which all rose more than 2.00%.

The next influential earnings report for the Dow will come from Home Depot next Tuesday morning. Investors are expecting a 23% rise in earnings compared to the previous quarter. In addition to this, analysts expect revenue to rise, and traders should note the company has beaten expectations over the past 4 reports. Home Depot stocks hold a weight within the Dow Jones of 5.78%.

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The price of the index continues to trade above the 75-Bar EMA and above the “neutral” point on the RSI. These factors indicate buyers are controlling the market. However, this morning the price is retracing, therefore a buy signal will not be active unless the price rises above $39,091 which is the breakout level, or at least forms a bullish crossover (8-bar EMA & 18-bar SMA).

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE  to access the full HFM Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE  to register for FREE!

Click HERE to READ more Market news. 

Michalis Efthymiou
Market Analyst
HFMarkets

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
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The BoE To Cut Rates In September. US Employment Data Falters!

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* The UK economy experiences its strongest growth since August 2023, with Monthly GDP increasing 0.4%, four times higher than expectations.
* The Bank of England saw 2 out of 9 members vote for an interest rate cut. The dovish members of the BoE are Dr Swati and Sir Ramsden.
* The BOE Governor, Mr Bailey, said two rate cuts are likely in 2024 as “one cut will keep us in restrictive territory”. However, he advises there is a higher chance the first cut will come in September.
* The UK’s FTSE100 declines close to 0.20% as the UK’s GDP reading indicates an interest cut is less likely to take place in June 2024.

GBPUSD – The UK Economy Moves Out of a Technical Recession!

The GBPUSD over the past 24-hours has been influenced by three factors: the monetary committee’s votes, the Governor’s guidance and the UK’s latest GDP figure. The GBPUSD first fell to a 2-week low due to the higher number of votes for an interest rate cute. However, the GBPUSD has since risen 0.77%. Therefore, how can traders view the price movement and the latest developments?

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A large factor influencing the pricing is whether the regulator is likely to adjust its policy in June or September. A rate cut in September would support the GBP as it would keep rates higher for longer compared to the Eurozone and other competitors. The Monetary Policy Committee votes indicates the BoE is almost ready to cut rates. The Governor also said they wish to steadily move away from a restrictive policy. In the UK a restrictive monetary policy is 5.00% and above.

The reason for the price increase is the Governor indicating that there is a higher possibility the regulator will cut in September not June. In addition to this, the strong economic growth confirmed this morning further lowers the possibility of a cut in June. This is because there is less pressure on the BoE to support a stagnated economy. Therefore, a rate cut is now likely to take place in September 2024, which is on par with the Federal Reserve’s guidance for its own policy.

The Federal Reserve and The US Dollar

The US Dollar on Thursday evening was considerably pressured by the Weekly Unemployment Claims, which normally has a limited affect. The US Unemployment Claims rose to 231,000, higher than predictions of 212,000 and the highest since November 2023. Therefore, the US has seen lower NFP data, higher unemployment rate and now higher unemployment claims. This has investors questioning if the US employment sector may be weakening for the first time since raising interest rates. If so, the Federal Reserve may consider a cut in July. Currently, the CM Exchange’s tool shows a 30.8% chance of a cut in July, if this figure rises, the US Dollar could potentially weaken.

GBPUSD – Technical Analysis

Technical analysis indicates the price of the GBPUSD may rise to the previous resistance levels between 1.25650 and 1.25936. However, if the market continues to price a Fed rate cut in September, it is improbable the exchange rate will reach the resistance level at 1.26340. The exchange rate currently trades above most trend lines such as the 75-Bar EMA and is above the 60.00 mark on most RSI periods. The price has slightly retraced since rising after the GDP announcement. For this reason, the buy signal has turned into a neutral. However, if the price rises above 1.25362, the buy signal may materialize again.

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Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE  to access the full HFM Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE  to register for FREE!

Click HERE to READ more Market news. 

Michalis Efthymiou
Market Analyst
HMarkets

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
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Market News – Stock markets traded mixed; Flat USD ahead of US CPI.

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Economic Indicators & Central Banks:

*Japanese government bond yields surged to multi years highs after the BOJ’s unexpected move to decrease the quantity of bonds it typically purchases during routine operations, signaling a more hawkish stance to the markets.
*BOJ Kato stated that it’s natural that monetary policy will revert to positive interest rates, while BOJ Governor Ueda signalled the potential for multiple rate hikes ahead.
*Chinese authorities have kicked off plans to sell $140bn of long-dated bonds on Friday, in order to support investment in key areas and reinforce economic momentum in the second quarter amid the country’s lengthy property crisis.
*US government plans to raise tariffs to a raft of Chinese exports were weighing on sentiment.
*BlackRock stated: The Yen’s weakness is turning foreign investors away from Japanese stocks.

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Financial Markets Performance:

*The USDIndex is steady at 105 lows, at 105.58 ahead of US CPI on Wednesday, while USDJPY is holding at 155.80, after retesting May’s high at 155.96.
*EURUSD steady above 1.0750 as the euro zone prepares for an inflation reading of its own on Friday.
*USOIL declined amid demand concerns and as traders looked ahead to an OPEC+ meeting on supply policy. On the supply front, the Iraqi Oil Minister initially claimed that production cuts were adequate and opposed further reductions but later deferred decisions to OPEC. Next OPEC+ meeting: June 1. Currently USOIL is at $77.78.
*Gold corrected to $2349 per ounce, from $2380 highs.

Market Trends:

*Asian stocks fluctuate between gains and losses, as sentiment was impacted by disappointing Chinese economic data alongside optimism amid reports indicating that the country plans to initiate the sale of ultra-long bonds.
*European markets are also narrowly mixed in opening trade, while US futures are slightly higher.
*The NASDAQ is outperforming. Bonds are finding buyers and the 10-year Treasury yield is down -1.0 bp, while Bund and Gilt yields have corrected -1.3 bp and -2.3 bp in early trade.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE  to access the full HFM Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE  to register for FREE!

Click HERE to READ more Market news. 

Andria Pichidi
Market Analyst
HFMarkets

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
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Market News – May 14.

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Economic Indicators & Central Banks:

*Asian stocks and European futures kept to small ranges as focus turned to upcoming US inflation reports.
*JGB yields surged to their highest levels in over a decade amid growing speculation that the BOJ might raise interest rates soon.
*Former central bank executive Momma stated that the BOJ might opt to deduct its planned bond purchases next month in an effort to revive a bond market that has been largely impaired by its ongoing substantial purchases.
*BOJ Governor Kazuo Ueda emphasized the importance of the market determining long-term yields independently rather than relying solely on the central bank’s actions.
*UK wage growth remained solid amid a slowdown in the job market, providing further arguments for the BOE’s monetary policy hawks to await more concrete signs of easing inflationary pressures before considering interest rate cuts.
*Eyes today are on producer price data in the US, followed by consumer price data the next day, which will provide insights into whether the Fed will consider interest rate cuts later in the year or postpone them until 2025.

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Financial Markets Performance:

*The USDIndex is steady at 105 lows.
*The Yen extended losses for an 8th day against the Greenback to a 2-week low. Currently USDJPY is at 156.45.
*EURUSD rebounded slightly to 1.0785, however overall holds within a downwards channel with key resistance at 1.0850.
*USOIL held steady ahead of the release of an OPEC market outlook, with traders eagerly awaiting signals regarding the extension of supply curbs. Despite a decline since April, oil prices have remained relatively high this year due to ongoing supply restrictions by OPEC and its allies, with expectations that these curbs will be prolonged into the second half of the year. Currently USOIL is at $77.78.
*Gold (-0.93%) declined further to $2338 per ounce. Copper rose at +2.46% and Platinum +0.54%.

Market Trends:

*The 10-year JGB yield to a 6-month high of 0.965%. The 2-year JGB yield, which closely reflects policy expectations, rose to 0.340%, its highest since June 2009. The 20-year and 30-year JGB yields also surged to their highest levels in 11 years and since July 2011, respectively.
*FTSE100 stands by record highs, the S&P500 is close to topping March’s record high. The Nasdaq rose by 0.3%, with four of the Magnificent Seven stocks rising. The Hang Seng has added 20% in a rally that is entering a fourth week.
*Alibaba and Tencent report earnings later today.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE  to access the full HFM Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE  to register for FREE!

Click HERE to READ more Market news. 

Andria Pichidi
Market Analyst
HFMarkets

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
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Market News – Treasuries rallied, NASDAQ at new high, DXY lower after PPI pop.

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Economic Indicators & Central Banks:

*JGB yields slipped, as markets paused amid a recent bond sell-off, awaiting a crucial US inflation report expected to influence the Fed’s short-term interest rate decisions. Remember, that typically yields move inversely to bond prices.
*US: Stronger than expected prints on PPI did not have the textbook effects on the markets. Interestingly, Treasuries and Wall Street rallied, while the US Dollar slipped. The guts of the report were not as worrisome as the headlines suggested, and the CPI is viewed as more important.
*Global equities are set for a fresh record after a big tech-led rally in US gauges.

Financial Markets Performance:

*The USDIndex slumped to 104.7, EURUSD rose to 1.0830 and USDJPY drifted at the EU open below 156.
*Gold rose almost 1% to $2358.12 per ounce, while USOIL advanced to $78.18 after shrank US stockpiles, and as traders looked ahead to a report from the International Energy Agency that’ll shed light on market balances into the second half.
*Copper spiked to a fresh record high at $5.12 a pound after a squeeze partly due to traders playing the arbitrage between futures on Comex and the Shanghai Futures Exchange.

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Market Trends:

*Big tech climbed, however, boosting the NASDAQ 0.75% to a new all-time high of 16,511. The S&P500 rose 0.48% to 5246. The Dow advanced 0.3%.
*Sony shares jumped by 12% after strong earnings, a stock split and a share buyback of ¥250bn ($1.6bn).
*Tesla gained 3.3%. Tencent Holdings surged after the company’s revenue beat estimates , while Alibaba Group Holding Ltd.’s slid on a profit plunge, highlighting the growing divergence between China’s twin Internet powerhouses.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE  to access the full HFM Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE  to register for FREE!

Click HERE to READ more Market news. 

Andria Pichidi
Market Analyst
HFMarkets

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
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Market News – Stagflationary Risk for Japan; Bonds & Stocks Higher.

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Economic Indicators & Central Banks:

*Stocks and bonds gave a big sigh of relief after CPI and retail sales came in below expectations, supporting beliefs the FOMC will be able to cut rates by September.
*The markets had positioned for upside surprises. Wall Street surged with all three major indexes climbing to fresh record highs.
*Technical buying in Treasuries was also supportive after key rate levels were breached, sending yields to the lows since early April.
*Fed policy outlook: there is increasing optimism for a September rate cut, according to Fed funds futures, BUT most officials say they want several months of data to be confident in their actions. Plus, while price pressures are receding, rates are still well above the 2% target, keeping policy on hold. But the market is now showing about 22 bps in cuts by the end of Q3, with some 48 bps priced in for the end of 2024.
*Stagflationary Risk for Japan: GDP contracted much sharper than anticipated, for a 3rd quarter in a row. This is mainly due to consumer spending. The GDP deflator though came in higher than expected but still down from the previous quarter. The sharper than anticipated contraction in activity will complicate the outlook for the BoJ, and dent rate hike bets.

[img]https://s.yimg.com/ny/api/res/1.2/W7.ikuufBBqF2taVYxKGYA--/YXBwaWQ9aGlnaGxhbmRlcjt3PTk2MDtoPTU0MDtjZj13ZWJw/https://media.zenfs.com/en/bloomberg_markets_842/56c0eabf19172295bf7e337b0640958d[/img]

Financial Markets Performance:

*The USDIndex slumped to 103.95, the first time below the 104 level since April 9.
*Yen benefitted significantly, with USDJPY currently at 154.35 as easing US inflation boosted bets on the Fed easing monetary policy this year, weakening USD, boosting the Yen.
*Gold benefited from a weaker Dollar and a rally in bonds and the precious metal is trading at $2389 per ounce. At the same time, the precarious geopolitical situation in the Middle East is underpinning haven demand.
*Oil prices rebounded slightly after the shinking of US stockpiles and the risk-on mood due to declined US Inflation. However USOil is still at the lowest level in 2 months, at 78.57.

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Market Trends:

*The NASDAQ popped 1.4% to 16,742. The S&P500 advanced 1.17% to 5308, marking a new handle. And the Dow rose 0.88% to 39,908.
*Treasury yields tumbled sharply too on the increasingly dovish Fed outlook. Additionally, the break of key technical levels extended the gains to the lowest levels since early April before the shocking CPI data on April 10 boosted rates.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE  to access the full HFM Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE  to register for FREE!

Click HERE to READ more Market news. 

Andria Pichidi
Market Analyst
HFMarkets

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
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Market News – Asian and European futures followed Wall Street lower.

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Economic Indicators & Central Banks:

*The Dow topped 40,000 for the first time ever, but was unable to close with that historic handle. Concurrently, the S&P tried for its 24th record high this year but failed too.
*The rise in Treasury yields after stronger than expected import prices, and a drumbeat from Fed officials that rates need to remain high for longer, encouraged profit taking.
*Most Asian equity markets and European futures have followed Wall Street lower, after US data dented rate cut hikes.
*Chinese data showing slowed consumption and a drop in home sales, although industrial production numbers looked relatively robust.
*Japan’s core consumer inflation slowed for a 2nd month in a row in April from a year earlier, while the core consumer prices index (CPI) is expected to decelerate to 2.2% from 2.6% in March, the lowest level in 3 months, but still at or above the central bank’s 2% target for more than two years.

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Financial Markets Performance:

*The USDIndex firmed slightly to 104.518 and up from the day’s nadir of 104.080. But it held a 104 handle for a second straight day. It traded above the 105 level from April 10 until May 15.
*Silver has surged nearly 25% this year, outpacing Gold and becoming a top-performing commodity, though it remains relatively inexpensive compared to gold. Both metals have hit record highs due to central-bank buying and increased interest in China.
*USOil is 0.75% higher at $79.23.

Market Trends:

*All three major US indexes closed slightly in the red after posting all-time highs on Wednesday.
*The NASDAQ closed with a -0.26% decline, while the S&P500 lost -0.21%, and the Dow was off -0.1% at 39,869. It was a corrective day for Treasuries too. Bonds unwound part of their recent rally that took rates down to the lows since early April.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE  to access the full HFM Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE  to register for FREE!

Click HERE to READ more Market news. 

Andria Pichidi
Market Analyst
HFMarkets

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
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Date: 20th May 2024.

Gold Reaches a New All-Time High: What’s Driving the Surge in Prices?

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*Gold renews its all-time highs after surging 1.64% on Friday and a further 1.24% during this morning’s Asian session.
*The price of Gold has risen due to 3 factors; Iran’s helicopter crash killing at least 2 politicians, a potential rate cut and a weaker US Dollar.
*Commodities all continue to increase with Copper leading after rising a further 3.45% intraday.
*Investors are refocusing on the NASDAQ in anticipation of NVIDIA’s quarterly earnings report, which will be made public mid-week.

XAUUSD – Weaker Dollar and Chinese Demand!

Gold’s price has been increasing for the past 2 weeks but saw significant gains mainly on Friday and early this morning. Another factor investors should note is that the demand is not solely coming from the US trading session but rather all 3 trading sessions (Asian, European & US). Why is Gold again renewing its highs?

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The first factor that investors need to take note of is that the price of all commodities have been rising over the past 2-weeks. Here we can see that commodities in general are seeing demand and lower supply, not solely Gold. The second factor is that China is still noticeably increasing their reserve in Gold as the country looks to enhance its currency. Additionally, the country is looking to de-Dollarize ahead of the US elections. China has considerably increased their orders for the commodity and investors should note that the Renminbi has become the fifth most traded currency in the world.

According to economists, the higher price has a lot to do with the increase in orders from certain countries. In addition to this, some investors continue to predict a rate adjustment from the Federal Reserve after a slight decline in inflation from 3.5% to 3.4%. However, traders should be cautious that the Fed’s representatives are not changing their rhetoric. Loretta Mester said that achieving their target of 2% will take longer than expected, but maintaining current interest rates will help reduce price pressure. The official added that the US Fed needed more evidence of an inflation reduction to begin easing monetary policy. Below are the dates some of the main global banks expect the Federal Reserve to start easing:

July 2024 – JP Morgan & Goldman Sachs

September 2024 – Morgan Stanley & UBS Group

December 2024 – Bank of America and Deutsche Bank AG.

Technical analysis continues to point towards an upward price movement including the VWAP, Moving Averages and Bollinger Bands, though the price is understandably overbought on most oscillators including the RSI. However, based on the previous two impulse waves on the daily chart, the price potentially can increase a further 2-3% before losing momentum if it is going to follow previous patterns.

USA100 – Investors Focus On NVIDIA Earnings Report

The USA100 was the worst performing index on Thursday and Friday. However, the index will again be under the spotlight as NVIDIA’s Quarterly Earnings Report will be released Wednesday evening. Economists have said one of the main reasons behind the loss of momentum towards the end of the week was the “higher weight” stocks underperforming. Of the “magnificent seven” stocks, only three have outperformed the NASDAQ over the past month. These include NVIDIA, Alphabet and Amazon.

On the positive side, the price this morning is increasing as are other global indices, indicating a “risk-on” appetite. Furthermore, an influential factor will be NVIDIA’s earnings and revenue data. Analysts expect the company’s Earnings Per Share to rise 7% and revenue to increase to $24.55 billion, a new record high. If the report is higher than expectations, the price of the stock is likely to rise and support the NASDAQ accordingly.

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Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE  to access the full HFM Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE  to register for FREE!

Click HERE to READ more Market news. 

Michalis Efthymiou
Market Analyst
HFMarkets

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
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Date: 21st May 2024.

NASDAQ Soars with AI and Semiconductor Stocks Leading the Charge, While AUD Struggles.

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*The NASDAQ witnesses a large surge in buy orders at the opening of the US trading session, adding 0.80%. The index has added 13.74% in 2024 up to now.
*AI & Semiconductor stocks are mainly behind the upward surge in the market ahead of NVIDIA’s earnings report tomorrow evening.
*The Australian Dollar is again the worst performing currency for a second day with the AUD Index trading 0.22% lower.
*The RBA’s Meeting Minutes confirm the committee deem a “pause” the strongest case, but that a hike may be necessary if data is “overoptimistic”.

USA100 – AI Stocks and The Semi-Conductor Sector Ensure Momentum Continues!

The NASDAQ saw a decline in the price before the US market opened, but quickly changed thereafter. At the opening of the US session, the NASDAQ rose for 3 straight hours adding 0.80% before losing momentum. Due to the bullish momentum, the index again rose to renew its all-time highs.

The best performing stocks with yesterday’s markets were largely AI driven companies as well as companies within the semiconductor sector. Some of the best performing stocks within these sectors were Applied Materials (+3.71%), Lam Research Corp (+3.29%) and Micron Technology (+2.96%). However, investors are of course mainly focusing on NVIDIA which is also likely to determine the investor sentiment towards the index in general. NVIDIA stocks rose 2.49% during yesterday’s session and is trading 0.27% higher during today’s pre-trading hours.

No major events are in the books for the day which may influence NASDAQ. However, investors will monitor the FOMC Member’s speech, Mr Christopher Weller, who is also likely to add to the rhetoric from the past week. However, investors have largely ignored comments from the Fed regarding less rate cuts than previously thought. Therefore, the speech is likely to have minimal effect unless extremely hawkish.

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Technical analysis does continue to point towards an upward price movement in the medium – longer term. The price waves continue to form higher lows and higher highs. Simultaneously, the price of the index is trading above the Moving Averages and above 50.00 on the RSI. However, technical analysts advise the upward price movement may be lesser than yesterday’s due to the upcoming earnings data.

The US 10-year bond yields rose 0.05% during this morning’s Asian session. ideally investors would like to see yields remain no higher than their current point to support a further upward trend. During yesterday’s session 73% of stocks holding a weight of more than half a percent rose. For further upward price movement, investors would ideally like to again see more than 70% of the components rise further.

AUDUSD – A Break Of The Support Level Could Strengthen Sell Signals!

This morning the AUDUSD exchange rate fell 0.33% to retrace upwards when reaching the previous support level. The Australian Dollar Index is the worst performing currency trading 0.22% lower. However, the exchange rate is struggling to gain momentum below the 0.66471 support level. If the price declines below this level, sell signals are likely to strengthen.

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For the exchange rate to gain momentum, the US Dollar Index will also need to support price action. The most recent support for the currency is the hawkish comments from members of the Federal Reserve Open Committee. Mrs. Loretta advises 3 rate cuts are no longer appropriate and more or less not possible, and also advises the market is no longer worried that the policy is too restrictive. Mr Bostic also added to the hawkish rhetoric.

The Reserve Bank of Australia’s Meeting Minutes confirm that the committee favor a pause and remain largely predictable. However, the Meeting Minutes also state the regulator would consider a hike if data became more optimistic. Nonetheless, this has not yet had a positive effect.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE  to access the full HFM Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE  to register for FREE!

Click HERE to READ more Market news. 

Michalis Efthymiou
Market Analyst
HFMarkets

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
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Date: 22nd May 2024.

UK Inflation Drop Boosts GBP, But Analysts See Correction Signals.

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*The NASDAQ forms its 5th bullish wave resulting in the index trading 8% higher this month alone. Investors are waiting for NVIDIA’s earnings report.
*The market awaits the release of the latest FOMC Meeting Minutes for further indications on the potential rate adjustments.
*The US Dollar Index declines to a 7-week low, but can tonight’s Meeting Minutes change the trend? Read below what economists are predicting.
*UK inflation declines from 3.2% to 2.3% in its largest drop since December 2023. The Pound increases as the inflation rate did not decline to 2.1% as previously

GBPUSD – UK Inflation Drops But Does Not Meet Previous Expectations!

The GBPUSD is trading 0.30% higher after the release of April’s UK inflation figures. The US Dollar and the Japanese Yen are the worst performing currencies of the day. Traders looking to speculate a rising Pound may benefit from these weakening currencies. The GBPJPY is trading 0.47% higher so far. However, investors should be cautious of any change in price action as the next session (European Market) opens.

The UK’s inflation figure fell from 3.2% to 2.3% which is the largest drop in 2024 so far and brings the Bank of England closer to its target. This would normally pressure the currency, but there are some factors which have triggered a bullish Pound. This includes the Core Consumer Price Index which fell from 4.2% to 3.9% instead of falling to 3.6% which were the previous expectations. Also, certain sectors did not see a decline in inflation in April, which is a continued concern. For these reasons, investors have increased their exposure to the Pound, supporting the currency. Also, economists are advising that the weakening inflation rate can increase investment demand which also further supports the country’s economy and subsequently the currency.

Furthermore, investors will also need to take into consideration the price condition of the US Dollar individually. Dollar traders will be focusing on tonight’s Federal Open Market Committee’s Meeting Minutes. The market will particularly be looking for clarity on how many adjustments are likely in 2024, if any at all. In addition to this, if an adjustment is likely in July, September or later in the year. If the report indicates less cuts and a delay, the US Dollar potentially can witness further demand and a change in trend. This is something which was particularly seen in April 2024.

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The price action of the GBPUSD is forming a bullish trend and most trend-based indicators are signalling a higher price. However, there are signs that the price may correct back to the previous range. For example, on the 4-Hour chart the price is witnessing a divergence signal. in addition to this, the price is also trading at a significant resistance level from November, December and January. Though, for the resistance level to become active, the Dollar will likely require support from the upcoming Meeting Minutes. In the short term, sell signals are likely to materialize after crossing 1.27400 and 1.27268.

USA100 – Bullish Trend, But Investor Focus On Meeting Minutes & NVIDIA Earnings

The NASDAQ saw a decline in the price as the US Open was approaching, however, the price momentum quickly changed when US investors started trading. The index rose 0.30% by the end of day and was the best performing US index. During the US Session 62.5% of stocks holding a weight of more than 1.00% rose while 37.5% fell. The main price drivers which supported the upward price movement were Microsoft, Alphabet, Apple, NVIDIA and Netflix.

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Investors will closely be monitoring the upcoming earnings report for NVIDIA, but also the FOMC’s Meeting Minutes. A more restrictive monetary policy can pressure the stock market, but the level of pressure and downward price movement will also depend on the results of NVIDIA’s earnings. Additionally, shareholders will also focus on Intuit’s Quarterly Earnings Report tomorrow evening, but this will have a lesser effect compared to NVIDIA.

A concern for intraday traders is the decline in indices around the world in markets which are currently open. For example, the DAX, FTSE100, CAC and Nikkei225 are all trading lower. In addition to this, the US 10-Year Bond Yields are trading 0.0027% higher which is additional pressure on equities. Nonetheless, technical analysis in the medium to longer term continue to point to a continued upward trend.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE  to access the full HFM Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE  to register for FREE!

Click HERE to READ more Market news. 

Michalis Efthymiou
Market Analyst
HFMarkets

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
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NVIDIA Surpasses Earnings Expectations, Fed Considers Another Rate Hike.

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*FOMC Meeting Minutes confirms certain members believe the current monetary policy may not be “adequately restrictive”.
*The US stock market depreciated after the Meeting Minutes. However, investors quickly bought shares after NVIDIA’s Quarterly Earnings Report. The US Stock Market on average rose 0.50% after the Meeting Minutes.
*NVIDIA’s Earnings Per Share rose from $5.16 to $6.12 and Revenue rose 15% in the first quarter of 2024.
*Yesterday the US Dollar Index rose up to 0.32% and shot upwards 0.15% in the 30-minutes after the Fed release.

USA100 – NVIDIA’s Earnings Increase Sentiment And The NASDAQ To An All-Time High!

On Wednesday, the NASDAQ spent most of the day witnessing intraday declines which gained momentum after the Fed Minutes. After the Federal Reserve Meeting Minutes, the NASDAQ was trading 0.69% lower and the SNP500 0.74% lower. The decline was a result of the ultra-hawkish comments within the Federal Open Market Committee regarding monetary policy and inflation. However, as the price fell to $18,619.54, the price thereafter surged more than 1.50% within the next 8-hours.

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The change in trend is a result of the positive Quarterly Earnings Report from NVIDIA. NVIDIA’s Earnings Per Share rose from $5.16 to $6.12 and Revenue rose 15% in the first quarter of 2024. Shareholders held onto their shares while buy orders rose triggering a much higher price. In addition to this, NVIDIA’s director’s speech expressed confidence in earnings and the upcoming quarters. NVIDIA’s management also compared their success to the industrial revolution.

As a result, NVIDIA’s stock rose more than 6.00% after market close and is now trading above $1,000. In addition to this, the comments and earnings data had a positive effect on investor sentiment in the broader stock market, but particularly for semiconductors and chipmaking companies. For example, AMD’s stocks rose almost 2.00% and Applied Material Stocks rose 1.75% after NVIDIA’s earnings report.

Due to the volatility the price of the index is obtaining primarily “buy” signals from indications and technical analysis in general. The price has also become “overbought” on the RSI on some timeframes but remains within a buy signal and not overbought on intraday timeframes. Though investors should note that the Fed’s Meeting Minutes does bear risk for the index. This will be expanded on below.

EURUSD – The US Dollar Rises As Fed Members Play With The Thought Of Another Rate Hike!

The EURUSD is trading within an upward facing corrective swing measuring 0.14%. The bullish price movement is currently only forming a retracement pattern as the EURUSD exchange rate has been trading within a bearish trend for 5 days but gained momentum yesterday due to the US Meeting Minutes.

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According to the Meeting Minutes, certain officials believe the policy requires a 25-basis points hike to achieve the 2% target. In addition to this, even the members which are known to be more dovish were troubled by the rise in inflation. Economists continue to believe the Federal Reserve is unlikely to increase rates despite the recent comments. There is a 49% possibility of a rate cut in September according to the CME FedWatch Tool. However, 13.00% of the market believe there will be no cuts at all in 2024.

The hawkish comments regarding higher interest rates are positive for the US Dollar and have triggered various sell signals for the EURUSD. However, investors should also note that a hawkish Fed can also significantly pressure the stock market. Currently, economists are battling amongst each other over whether the higher earnings or the hawkish Fed will be the main price driver. Currently, the higher earnings data is winning, but this may not be the case if inflation does not decline this month.

In terms of the Euro, the latest price driver is the European PMI data for Germany and France. German PMI beat expectations while French data saw a mixed reaction. Investors will now turn their attention to the US data later in this afternoon.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE  to access the full HFM Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE  to register for FREE!

Click HERE to READ more Market news. 

Michalis Efthymiou
Market Analyst
HFMarkets

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
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Market News – Erosion in Fed rate cut odds; Stocks, Oil & Gold under pressure

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Economic Indicators & Central Banks:

Nvidia bigger than entire stock market – Market cap now greater than Australia, South Korea and Russia.

* After the massive Nvidia beat, rallying over 9% on the day, failed to reinvigorate the rally at the close. It was unable to support the major indexes.
* Wall street: The profit takers ruined the party, taking advantage of recent record highs to take some chips off the table. Erosion in Fed rate cut expectations provided extra incentive to sell.
* Strong US economic activity: Strong PMI, tight jobless claims, slump in Home sales and high home prices pushed Fed rate cut expectations further back. US jobs data released showed initial applications for unemployment were slightly lower than expected, indicating the economy was holding up despite high rates. The data, Fedspeak and the FOMC minutes, have cast doubt over whether officials will have enough evidence of the disinflation trend to begin cutting rates by September.
* It is an early close in bonds today and that could accelerate activity as traders position ahead of the long Memorial Day weekend.

Asian & European Open:

* Asian equities dropped today, following Wall Street lower.
* Chinese officials announced an Rmb300bn ($42bn) lending package to help buy back real estate from the nation’s indebted property developers.
* Japan: Inflation slowed for the 2nd straight month in April, making it difficult for BOJ to proceed with further tightening. Inflation could pick up due to weaker Yen and rising Oil.
* BOE UK consumer confidence recovered while retail sales slumped. For the BoE that means there is less risk of a wage-price spiral as companies will increasingly struggle to pass on higher labor costs. More arguments in favor of an early rate cut then, despite recent data showing that headline inflation is not coming down as fast as hoped.

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Financial Markets Performance:

* The USDIndex found its footing, extending against G10 for a 5th day.
* Pound dropped after the UK Retail Sales, with GBPUSD at 1.2670.
* Oil declined after hitting its 3-month low as the market flashed signs of weakness ahead of the US summer driving season. Elsewhere, Gold remains weak at $2337, for a 3rd day.

Financial Markets Performance:

* The Dow lost -1.5% to 39,065 with Boeing down over -7%. Live Nation dove as the DoJ filed suit to divest Ticketmaster. The S&P500 slumped -0.74% to 5267. And the NASDAQ declined -0.39%.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE  to access the full HFM Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE  to register for FREE!

Click HERE to READ more Market news. 

Andria Pichidi
Market Analyst
HMarkets

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
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The New Zealand Dollar Tops All Currencies, Gold Lags Behind Silver!

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*Silver and Gold increase in value during Monday’s Asian Session. Silver rises more than 2.00%, considerably more than Gold. Will Gold gain momentum during the US trading session?
*Citi Group advise the price of Gold can potentially rise to $3,000 in the next 12 months. The institution also advises commodity prices are likely to remain high.
*The New Zealand Dollar is the best performing currency on Monday followed by the Japanese Yen. The Yen loses momentum as the Asian Session comes to an end.
*Of the NASDAQ’s 20 most influential stocks, only 4 ended Friday’s session in the red. The index ended the session 1.10% high and 0.06% higher in today’s Asian Session.

XAUUSD – Gold Lags Behind Silver, But Where Will Buy Signals Materialize?

The price of Gold fell significantly for 3 consecutive days and a total of more than 5.00%. However, investors want to determine how the price is likely to develop throughout the week. On the 2-hour chart the price is trading below the 50.00 on the RSI and below the 75-Bar EMA. Both these indicate a downward price movement. However, the price is trading at a previous support level and the RSI has risen above 40.00. So, at which point are investors likely to see buy or sell signals?

The strongest signals will be able to be seen if the price witnesses a downward price movement as this will also be in line with the 2-hour chart and not provide conflicting signals. If the price trades below $2,341.30, the price will see an ultra-short-term signal for some bearish price action. If the price trades below $2,338.95, a short-term signal will indicate a slightly larger decline. Bullish signals will be active above $2,345.00 or at the breakout at $2,347.50.

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According to Citi group, the price of Gold still has the possibility of reaching as high as $3,000, but would require the Federal Reserve to start adjusting their policy. According to Citi Group, five rate hikes over the next 12 months will put Gold priced at $3,000. However, many economists believe the Federal Reserve will only cut on 1-2 occasion in 2024. Fed officials said the share of goods whose prices were growing by 3–5% or higher is now greater than it should be under normal conditions, and the employment sector remains resistant to the measures taken. However, according to Bostic, a transition to reducing borrowing costs is possible but not earlier than October.

NZDCHF – High Inflation Continues to Support The New Zealand Dollar

The best performing currency of the day is the New Zealand Dollar, while the worst performing is the Swiss Franc. However, due to the larger spread, which is traditional to this pair, investors hold on for larger price movements. On the 2-hour chart the price of the exchange has continuously traded above the 75-Bar EMA since the 13th May and is trading almost 3.50% higher over the past month.

The upward price movement is largely due to the high inflation in New Zealand and the central banks reluctancy to indicate a rate adjustment in the near future. In addition to this, the Swiss National Bank also is believed to be one of the most bearish central bank globally. New Zealand’s inflation rate is continuing to decline and is not witnessing a slowdown like the US. However, the inflation rate remains at 4.00% significantly higher than Switzerland’s 1.4% inflation rate.

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Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE  to access the full HFM Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE  to register for FREE!

Click HERE to READ more Market news. 

Michalis Efthymiou
Market Analyst
HFMarkets

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
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Market News – Stocks Mixed, USD Down ahead of crucial inflation data later this week.

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Economic Indicators & Central Banks:

*ECB officials continue to flag a June cut, but even ECB chief economist Lane, hardly one of the hawks, stressed that policy settings will likely have to remain restrictive for the rest of the year. ECB’s Schnabel wants to reserve QE for moments of crisis. Villeroy says ECB shouldn’t rule out July cut.
*Lagarde will have to perform a difficult balancing act next week, to convince markets that all options remain open for the second half of the year.
*FT reported: Chinese property developers saw their shares rally in recent weeks after Beijing announced a real estate support package, but have subsequently sold off amid concerns the measures will not be enough to help the stricken sector.
*Japan’s service prices rose 2.8% year-on-year, the fastest increase in over 30 years, indicating a broadening inflation trend. This jump, surpassing economists’ 2.3% forecast, supports the case for the Bank of Japan to raise interest rates. The BOJ sees service prices as crucial for gauging inflation spread. This data may prompt the BOJ to consider an earlier rate hike, with some forecasts suggesting a possible move by July.

Asian & European Open:

*Chinese equities declined with real estate companies dragging down the country’s benchmark index.
*European & US futures arehigher as the Dollar slipped before a swath of inflation prints that’s expected to influence the direction of global monetary policy.
*All eyes this week are on fresh inflation data from Australia to Japan, the euro region and the US. The ECB is set to release its April CPI expectations later in the day.

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Financial Markets Performance:

*The USDIndex slipped for a 2nd day, retesting 6-month trendline. Currently set at 104.35.
*Gold prices remained steady as the Dollar eased, with investors eyeing key US inflation data for hints on potential Fed rate cuts. Spot gold held at $2,342 per ounce.
*Oil prices steadied after 2 days of gains, i.e. at $78.70, despite rising Middle East tensions following the death of an Egyptian soldier in a clash with Israeli troops. Overall, prices have dipped since early April due to weakening demand from Asia, leading Brent’s prompt spread close to a contango structure, signaling increasing supply relative to consumption.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE  to access the full HFM Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE  to register for FREE!

Click HERE to READ more Market news. 

Andria Pichidi
Market Analyst
HFMarkets

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
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Market News – Stocks drop with bonds.

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Economic Indicators & Central Banks:

*The NASDAQ was the star as the markets, of it rallied 0.59% to close at 17,019.88 for a fresh record high. And it is its first time over the 17,000 level. A 7% pop from Nvidia supported.
*Fed Kashkari said he wants to see “many more months” of positive inflation data before a rate cut.
*German GfK consumer confidence improves further. All signs are that consumption trends should improve with the rise in real-disposable income as falling inflation, rising wages and the prospect of rate cuts boost sentiment.
*US consumer confidence beat assumptions. Confidence has displayed only a slight updraft since mid-2022, after a prior deterioration from mid-2021 peaks.

Asian & European Open:

*European & US stocks slipped earlier today against a backdrop of rising government bond yields. DAX fell 0.2% and FTSE lost 0.06%. Traders are pricing in that the ECB will lower its deposit rate when policymakers meet next week.
*Asia stock market dipped as Chinese tech and property companies declined. The Hang Seng Tech index shed 2.3%.

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Financial Markets Performance:

*The USDIndex is steady and Treasury yields also held firm ahead of key inflation data, which could offer more clarity on the Fed rate trajectory.
*The USDJPY fell to 156.88 nearing levels that prompted suspected interventions by Tokyo in late April and early May. Currently rebounded again above 157. Japanese officials might issue verbal warnings again, but without tangible action, the USDJPY could march towards late April levels
*The EURUSD dipped to 1.0830 but still marked its first monthly gain in 2024. Meanwhile, the GBPUSD was last at 1.2760.
*Gold steadied at $2350 per ounce as markets wait for key US PCE numbers at the end of the week. Bullion hit a record high early last week, only to post the sharpest weekly correction this year as the Fed reiterated the “high-for-longer” message.
*Oil broke the $80 barrier as Middle East tensions have picked up again. Markets are now looking ahead to the release of key US inflation data and the OPEC+ meeting on June 2.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE  to access the full HFM Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE  to register for FREE!

Click HERE to READ more Market news. 

Andria Pichidi
Market Analyst
HFMarkets

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
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Market News – Yields jump; Stocks under pressure.

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Economic Indicators & Central Banks:

*The FOMC’s high-for-longer stance, along with some increasing fears of a rate hike, continue to weigh on Treasuries. That’s taking a toll on Wall Street too with profit taking from recent record highs knocking stocks down further.
*There was weakness in EGBs after stronger German inflation and wage data.
*US Yields have risen since the market breathed a sigh of relief after cooler CPI and retail sales, and are back near the highs since November.
*Global equities are headed for their worst week since mid-April.
*In New Zealand, the new government delivered on its election promise to cut taxes in its first budget even as the Treasury forecast bigger deficits and a delayed return to surplus.

Asian & European Open:

*Wall Street dropped, led by the Dow’s -1.06% decline. The S&P500 declined -0.74%, with the NASDAQ -0.58% lower. Several earnings reports have been less than stellar as well. Salesforce disappointed today, while HP beat. Meanwhile, retailers are coming into the spotlight and there are fears of weakness.

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Financial Markets Performance:

*The USDIndex has been benefiting from the hawkish outlooks. It has bounced back over 105.
*The USDJPY fell, with the Yen advancing after weakening to beyond 157.50 on Wednesday, falling through a level that had prompted the latest round of suspected action.
*The Rand extended losses as South Africa’s election vote count gathers pace.
*Gold and Oil steadied. USOIL is well below the week’s high however it has been ranging since yesterday afternoon as traders look to US stockpile data later today and an OPEC+ meeting at the weekend for more clarity on the supply and demand outlook.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE  to access the full HFM Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE  to register for FREE!

Click HERE to READ more Market news. 

Andria Pichidi
Market Analyst
HFMarkets

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
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OPEC+ Announces Gradually Higher Supply and NVIDIA a New Accelerator.

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*Oil declines as the European Cash Open edges closer. Oil prices have fallen for 4 consecutive days measuring almost 4.00%.
*OPEC+ members advise the group will have the option to not continue voluntary cuts from September onwards.
*All US and global indices start Monday’s trading higher after a poor end to May 2024. The bullish price gap illustrates a potential “risk-on” market.
*NVIDIA announces its next generation of accelerator chips and promises annual upgrades. NVIDIA stocks are already trading 0.55% higher in pre-trading hours.

USOil (Crude Oil) – Voluntary Cuts May Gradually Fade!

The price of Crude Oil fell almost 4.00% in the last 3 days of last week due to the OPEC+ meeting. The meeting is now at an end and journalists are pointing out 2 key points. The first, is that the OPEC+ group will keep limitations on production as it has since COVID-19. The second, is that countries which have voluntarily added additional cuts will have the option to reduce these cuts from September onwards.

According to analysts, the market should not necessarily “overreact”, because if OPEC+ increases supply, it will only be gradual. Additionally, analysts also advise the group will only look to re-introduce production if the market conditions allow it to. Nonetheless, traditionally, additional supply is known by analysts to apply downward pressure on commodities. This is something which can also be seen over the past week, but investors will be keen to see the price drop below the support level.

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The support level has been a key psychological level for investors throughout the month of May, specifically on 3 occasions. The price is currently trading below the 50.00 on the RSI and below most longer-term Moving Averages. If the price declines below the 65.00 Fibonacci level at $76.70 per Barrel, momentum will signal possible further decline.

USA100 – NVIDIA Announces a New Accelerator Chip!

The NASDAQ struggled within the previous week and at one point was down more than 3.00%. However, a large surge of buyers towards the end of Friday’s session saw a strong rebound and the index also trades higher during today’s Asian session. The NASDAQ is currently being influenced by 3 factors. However, investors will also give importance to the pricing of rate adjustments after the US employment data.

The first factor prompting investors to increase tech-stock exposure is NVIDIA. The CEO of the company has again advised the technology and AI market will continue to grow and become more aggressive. In addition to this, Mr Huang advised NVIDIA is releasing a new accelerator chip and promises more within the upcoming year.

A second positive factor for not only the NASDAQ, but global indices, is most analysts believe the European Central Bank will lower interest rates for the first time in the current cycle. If more global banks decide to reduce the restrictiveness of their monetary policy, stocks will become more attractive. However, only if the move is not a response to potential economic contraction.

Lastly investors are also taking advantage of the lower entry point and feel an improved sentiment as Oil prices are declining. Investors hope lower oil prices will apply less upward pressure on inflation.

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If the price rises above $18,638.83 the price will form a bullish breakout pattern which indicates upward movement. However, for a stronger and longer-term bullish trend, investors will be keen for the price to increase above the 75-Bar EMA and 100-Bar SMA. These two moving averages are currently priced at $18,658.28 and $18,733.30.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE  to access the full HFM Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE  to register for FREE!

Click HERE to READ more Market news. 

Michalis Efthymiou
Market Analyst
HFMarkets

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
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The Euro Declines As The ECB’s Rate Decision Approaches!

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*The EURUSD retreats from recent highs and gains strong indications from momentum indicators. The Euro also declines against the Japanese Yen.
Stocks decline in Tuesday’s pre-trading session, but will lower oil prices soon prompt a new surge of buyers?
*The US economy shows signs of slowing, but analysts advise no recession while employment remains strong.
*Chip-makers save the NASDAQ from witnessing a strong decline on Monday. NVIDIA rises 4.90% and Micron Technology 2.54%.

USA100 – NVIDIA Saves the NASDAQ From Another Decline!

The NASDAQ saw prices increasing throughout the day but fell within the first 4 hours of the US session. However, like Friday, investors re-entered the market at the lower price in the second half of the session. As a result, the NASDAQ ended the day 0.47% higher, but this was largely due to good performance from NVIDIA stocks which rose more than 4.90%. According to Wall Street, without NVIDIA, the NASDAQ would most likely have ended lower. NVIDIA is currently the fourth most influential company amongst the NASDAQ’s components.

The latest news which is holding investor attention is the latest Purchasing Managers Index, which is one of the few leading indicators. Other economic data are known as laggings as they are based on past data rather than sentiment and future outlook. The ISM Manufacturing PMI and Manufacturing Prices both read lower than expectations and lower than the previous month. However, investors should not necessarily “overreact” as analysts advise this would not mean anything unless employment also contracts. Additionally, the Final Manufacturing PMI read 51.3 which still indicates economic expansion, and the lower oil prices can support stocks in the longer term.

A slight decline is not necessarily negative for the stock market as long as there is not a higher risk of a recession. The lower consumer demand and economic activity could prompt the Federal Reserve to consider more than 1 rate cut in 2024. 53.0% of large traders are betting on this, up from 49.0% before the publication of the statistics. Additionally, most experts predict that the regulators will cut the interest rate twice over the course of the year, totalling 0.50%.

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Nonetheless, technical analysis indicates there is still the possibility of the price declining. The price was unable to remain above the main sentiment lines and did not form a higher high. At the moment, the RSI is currently priced at 50.30 which indicates the price may witness a reverting price condition.

If the price rises to a new high breaking above $18,638.50, the momentum could indicate upward price movement again. Otherwise, bearish crossovers on the 5-minute chart will continue to indicate valid downward momentum. Currently, European stocks are declining and if they keep falling, investors can use this as an indication of a risk-off sentiment.

EURUSD – The Euro Gives Up Gains As The ECB’s Rate Decision Approaches

The price of the EURUSD continues to form higher highs and higher lows but is currently trading within a downward price movement. If the price declines below 1.08576, the bullish trend pattern will be broken. Investors are currently contemplating the timing of the European Central Bank’s first interest rate cut.

The EU Manufacturing PMI rose from 45.7 points to 47.3 points, and the German PMI from 42.5 points to 45.4 points, justifying preliminary estimates. Experts believe that the European economy is gradually recovering but sustainable growth has not yet been achieved. On Thursday, the European Central Bank will make a decision on its policy: according to forecasts, regulator officials will reduce the interest rate from 4.50% to 4.25%, the deposit rate from 4.00% to 3.75%, and the marginal rate from 4.75% to 4.50%.

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The EURUSD is seeing indications of upward price movement on the 2-hour timeframe, but so far is declining against most currencies. In addition to this, the price is witnessing strong bearish momentum and bearish indication on the 5-minute chart. Therefore, the current signals point towards a short-term bias. However, if the momentum continues investors may revisit this outlook and consider a full correction.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE  to access the full HFM Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE  to register for FREE!

Click HERE to READ more Market news. 

Michalis Efthymiou
Market Analyst
HFMarkets

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
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US Job Vacancies Fall to Their Lowest Level In 3 Years.

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*US Job Vacancies fell to their lowest level in more than 3 years adding to fears of economic contraction.
*This week US PMI data falls and there are now lower job vacancies. Has the US economy passed its peak and is now in a downfall?
*Analysts advise if bond yields drop below 4.300%, yields can fall as low as 4.00% in the near term.
*Stocks rise to a weekly high as investors predict earlier rate hikes. A pause in September has fallen to a 35.00% possibility (5.00% lower) according to the Chicago Exchange.

USA500 – US Job Vacancies Fall to Their Lowest Level In 3 Years!

The SNP500 on Tuesday struggled due to poor investor sentiment and fear of economic slowdown. However, the price rose due to the latest US JOLTS Job Openings which shows less job vacancies within the US economy. This is due to investors changing their view on future interest rate cuts. Investors are evaluating whether the poorer economic data will tempt the Federal Reserve to lower rates, which supports the economy and makes stocks more attractive.

However, analysts advise a strong stock market needs a balance between the economy and monetary policy. If investors fear a recession, shareholders may opt to lower exposure to the stock market regardless of lower interest rates. In order to monitor investor sentiment, the market will continue to monitor the VIX which has risen over the past week. In addition to this, investors will also monitor if the High Low Index falls from recent highs.

The JOLTS Job Openings has fallen from 8.49 million to 8.06 million and is 700,000 lower than the 6-month average. Investors will now give more importance to today’s ADP Employment Change and tomorrow’s Weekly Unemployment Claims. If both also significantly fall, stocks can gain upward momentum due to potentially lower rates or can collapse on recession fears. This will also depend on today’s ISM Services PMI. Analysts advise investors will ideally want to see lower employment data and a positive PMI or visa versa. We can see here there is a thin line between lower rates and a harsh landing.

Over the past week bond yields have significantly fallen which is positive for the stock market. However, the 10-Year Treasuries are 0.013% lower now. If bond yields fall below 4.300%, the yields can fall as low as 4.000% which is known to be positive for stocks in general. Oil prices have fallen almost 9% in 5-days which could also improve sentiment and weaken inflation over the next 2-months.

European stocks open higher as we approach the European Cash Open. However, investors will monitor the price movement after the US news releases. The SNP500’s price is currently trading above the main sentiment lines and Moving Averages which is a positive indication. Now the price is slightly lower but if it rises above $5,306.83 without forming a lower low beforehand, buy signals will become stronger.

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USDJPY – The Japanese Yen Witnesses The Largest Currency Decline!

The day’s worst performing currency is the Japanese Yen while the best performing is the US Dollar. Even though the US Dollar is being pressured by a higher chance of lower rates, the Fed’s policy is still more competitive than most Central Banks. In addition to this, the Dollar’s safe haven element may also play a part. The exchange rate is witnessing buy signals on most indicators, but technical analysts are cautious after already seeing a 0.72% climb this morning.

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Bank of Japan (BoJ) Deputy Governor Ryozo Himino stated today that officials should closely monitor yen movements due to their potential significant impact on the national economy. Consequently, currency weakness will be a crucial factor in deciding the timing and extent of the next increase in borrowing costs. BoJ Governor Kazuo Ueda also emphasized that the regulator’s primary objective is to allow the market to set long-term interest rates while retaining the capability to scale back large-scale bond purchases in the short term.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE  to access the full HFM Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE  to register for FREE!

Click HERE to READ more Market news. 

Michalis Efthymiou
Market Analyst
HFMarkets

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
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Ideal Economic Conditions Push The NASDAQ To New Highs!

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*Economists expect the European Central Bank to cut interest rates this afternoon. However, investors will be keen to hear how many cuts are likely in 2024 after strong wage growth.
*The NASDAQ climbs to a new all-time high while economic data indicates an earlier rate adjustment but not a recession.
*The NASDAQ rises more than 2.00% on Wednesday. 88% of the most influential components within the NASDAQ rose.
*The US employment sector continues to witness signs of a slowdown, but investor sentiment rises while the ISM Services PMI rises to a 9-month high.

USA100 – 88% of NASDAQ’s Components Rise!

The NASDAQ rose again to an all-time-high after obtaining the ideal economic data to signal a sooner rate adjustment but not a harsh landing. The ADP Non-Farm Employment Change fell to 152,000 and the JOLTS Job Openings to 8,060,000. The data indicates the US employment sector is now at a higher risk of declining, but not yet necessarily on the downturn. Simultaneously the ISM Services PMI rose to a 9-month high which points to potential economic growth in the services sector.

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As mentioned during yesterday’s market analysis, in order for the stock market to witness a stronger bullish impulse wave, investors will be looking for two elements. Economic data to pressure the Fed to adjust interest rates, but also some positive data to lower the risk of a recession. This was the primary reason for the strong trend observed during yesterday’s US session, marking one of the rare occasions when the asset increased without any pullbacks.

The 11 stocks with the highest “weight” all rose in value and only 12% of the most influential stocks declined. The best performing stocks were Broadcom (+6.18%), Applied Material (+5.25%) and NVIDIA (+5.16%). The only stocks which did not witness an increase were PepsiCo which fell 0.23% and Cisco Systems which fell 2.95%.

The NASDAQ is obtaining clear indications of upward price movement on all indicators (2-Hour & 4-Hour Chart). However, the price is trading slightly lower this morning which may prompt short term traders to hold off buy signals. In order to obtain a further buy signal, technical analysts point to 3 potential entry points. Based on the 100-Bar SMA the 5-Minute chart indicates a buy signal above $19,077.09, Fibonacci indicates a buy signal at $19,082.50 and the breakout level is at $19,095.00.

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However, volatility is likely to rise after the European Cash Open and after the European Central Bank’s rate decision. Most economists believe the European Central Bank will cut interest rates 0.25%, and according to Bloomberg, this has almost been fully priced within the market. However, economists advise a key factor will be how many rate cuts are likely. Over the past two weeks, the Eurozone witnessed higher wage growth, economic growth and sticky inflation. Therefore, the main question will be how many interest rate cuts will come in the rest of 2024.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE  to access the full HFM Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE  to register for FREE!

Click HERE to READ more Market news. 

Michalis Efthymiou
Market Analyst
HFMarkets

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
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ECB closer look: All options open for the second half of the year!

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ECB officials continue to dampen rate cut speculation, following on from Lagarde’s hawkish comments yesterday. Officials have been out in force this morning to continue stressing that the inflation outlook remains uncertain and that the central bank is not committing to a particular rate path for the rest of the year.

The ECB cut rates by 25 basis points, but as we expected it was a “hawkish” cut that left all options open for the second half of the year. Lagarde repeatedly stressed that future decisions will be data dependent, and even refused to confirm that yesterday’s move was the first step of an easing cycle. Rate cuts in September and December are still a possibility, but not cast in stone.

Simkus admitted that there may be more than one rate cut this year, but on the whole, the comments were designed to keep a lid on speculation that the central bank kicked off a rate cut cycle yesterday. Austria’s central bank head Holzmann went on record yesterday to confirm that he was the sole dissenter objecting to a cut yesterday, and so far the doves have been quiet, which is helping to affirm Lagarde’s hawkish message yesterday.

Details of the Rate Cut

The ECB delivered the first rate cut in five years and lowered key rates by 25 basis points. The deposit rate is now at 3.75% and the main refinancing rate at 4.25%. It was a “hawkish cut,” as near term inflation forecasts were revised higher, and Lagarde flagged that domestic inflation remains high. The statement stressed that the ECB is not pre-committing to a particular rate path, and the comments leave all options on the table for the second half of the year.

Economic Activity and Forecasts

The ECB noted the improvement in economic activity through the first quarter of the year. Lagarde also highlighted that manufacturing is showing signs of stabilization, with stronger exports expected to support growth in coming quarters. At the same time, monetary policy should be less of a drag on demand over time, according to the ECB. The new set of forecasts show GDP rising 0.9% this year, which is more than the 0.6% expected back in March. The forecast for 2025 has been revised slightly down to 1.4% from 1.5% previously, and the ECB still expects a slight acceleration to 1.6% for 2026.

The inflation forecast for this year was raised to 2.5% from 2.3%, and the projection for 2025 was hiked to 2.2% from 2.0%. As such, inflation will fall toward the target later than previously anticipated, though the forecast for 2026 was left unchanged at 1.9%. This means the headline rate is still expected to fall below the target at the end of the forecast horizon.

Upside Risks to Inflation

The statement noted upside risks to the inflation outlook from wages and profits, which could be higher than currently anticipated. Geopolitical tensions and extreme weather events could also push up prices once again, according to the ECB. At the same time, the ECB acknowledged that inflation could come in lower than anticipated if monetary restrictions have more of a dampening effect than currently anticipated, or if global growth weakens more than projected.

The press conference was mainly dedicated to driving home the point that future decisions will depend on data available at the time of the respective meeting. Lagarde even refused to confirm that the central bank has effectively kicked off an easing cycle, and said in response to a question that she wouldn’t necessarily say that the ECB started a “dialing-back process”. She suggested it is likely, but refused to confirm it, which in theory means rates could actually go up again.

This seems unlikely, given that this move was a near unanimous decision, but its makes clear that the ECB will not cut rates at every meeting and that the outlook for the rest of the year is still very much open. The ECB still thinks that monetary policy needs to remain restrictive for the foreseeable future against the backdrop of high domestic inflation. However, as chief economist Lane suggested recently, officials will have to debate at every meeting whether the data allows the central bank to dial back the degree of restrictiveness.

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Employment and Inflation Dynamics

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Wage growth, profits, and services price inflation will remain the key numbers to watch through the rest of the year. Lagarde pointed to data on the compensation of employees, due to be released tomorrow, but also flagged that current wage agreements are often still backward looking, as they reflect attempts to compensate for the sharp rise in prices since the start of the Ukraine war. As we flagged previously, the multi-year wage agreements in Germany are a prime example of that. However, as Lagarde highlighted, the deals on the table so far show sharp increases for this year, but also imply a slowdown in wage growth in coming years.

However, unemployment is at a record low and the number of vacancies has dropped only slightly. At the same time, service price inflation remains stubbornly high, which suggests that companies have sufficient room to pass on higher labor costs. With real disposable income rising, thanks to lower inflation and higher wages, companies could find it even easier to hike prices in the second half of the year, and yesterday’s rate cut is also likely to boost demand. In the current situation, this could add to domestic price pressures.

Looking ahead, the only thing that is clear is that Lagarde did her best to keep expectations of back-to-back cuts under control. The chances still are that the ECB will deliver two more 25 basis point cuts in September and December, but at this point, nothing is cast in stone.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE  to access the full HFM Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE  to register for FREE!

Click HERE to READ more Market news. 

Andria Pichidi
Market Analyst
HFMarkets

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
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Market News – Inflation reports dominates!

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Economic Indicators & Central Banks:

* The selloff in Treasuries continued ahead of the FOMC decision tomorrow, though losses were moderate. Disappointment that the continued strength in the labor market will push back any easing until at least September at the earliest continued to weigh.
* Chinese stocks dropped after traders returned from a long weekend, weighed down by weak travel spending and renewed concerns over the property sector, raising doubts about the sustainability of China’s economic recovery.
* Developer Dexin China Holdings gets liquidation order from a Hong Kong court adding to a growing number of legal victories for creditors involving overdue debt.
* Geopolitical risks also affected shares of electric vehicle makers as traders awaited the European Commission’s decision on provisional duties expected this week.
* Australian business confidence turned negative in May, and conditions slipped to below-average levels, indicating that elevated interest rates and a worsening consumer outlook are weighing on the corporate sector.
* Markets are also closely monitoring potential fallout from political upheavals in Europe.

Asian & European Open:

* All three major indexes closed higher on Monday, with the S&P500 and Nasdaq both hitting new records. The Dow ended the day up about 0.2%, following a modest finish to a winning week.
The CSI 300 Index of mainland shares fell up to 1.4% after reopening from the Dragon Boat Festival holiday, while Hong Kong-listed Chinese shares were among Asia’s biggest decliners, dropping as much as 2%.
* Apple Inc. sank despite unveiling new artificial intelligence features. The company’s suppliers also dropped after Apple’s latest AI platform was seen as disappointing.
* Billionaire Elon Musk stated he would ban Apple devices from his companies if OpenAI’s software is integrated at the operating system level, calling it a security risk.

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Financial Markets Performance:

* The USDIndex has caught a bid with the push back to rate cut expectations. It closed at 105.150, back with a 105 handle for the first time since May 14.
* The EURUSD stalled at 1.0770, while GBPUSD declined slightly today after the tight labor data.
* USOIL held the biggest jump since March ahead of an OPEC report that will provide a snapshot on the market outlook.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE  to access the full HFM Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE  to register for FREE!

Click HERE to READ more Market news. 

Andria Pichidi
Market Analyst
HFMarkets

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
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Market News – Steady ahead of the Big Day!

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Economic Indicators & Central Banks:

* Asian stocks edged up, driven by the technology sector, while the US Dollar remained firm ahead of the US inflation report and Fed policy decision.
* China’s CPI gains held above zero in May while factory-gate prices remained stuck in deflation, signalling ongoing weak demand.
* UK GDP stagnated in April. Monthly GDP numbers came in a tad better than anticipated, with activity stagnating, rather than contracting -0.1% m/m, as Bloomberg consensus forecasts had predicted. The recovery remains uneven though.
* The FOMC began day 1 of its 2-day meeting with the decision and the new quarterly forecasts (SEP) at 21:00 GMT following by Chair Powell’s press conference at 21:30 GMT. The Fed is universally expected to maintain a steady rate stance, leaving all of the focus on the new forecasts, Chair Powell’s press conference, and the policy statement. It is widely expected that the “dovish” dot plot from March that showed three cuts (though it was a close call for two) will be revised toward a more hawkish stance.

Asian & European Open:

* Treasuries steadied after rising on a solid $39 billion sale, which reflected speculation that inflation reading will help make the case for the Fed to cut rates this year.
* The NASDAQ rebounded and advanced 0.88% into the close to another record at 17,343. Similarly the S&P500 rose 0.27% to 5375, also a new record (27th of the year).
* A surge in Apple shares (7%) supported. The Dow slumped -0.3%, hurt by financials and industrials that overshadowed a gain in IT.
* China Evergrande New Energy Vehicle Group plunged 20% after warning of losing assets.

Financial Markets Performance:

* The USDIndex had a good first half, rising to a high of 105.46 before fading to 105.24. However, it’s above the 105 level for a second straight session (first time since May 13,14) and the highest since early May.
* The EURUSD was down for a fourth session at 1.0737 amid political turmoil in Europe.
* OIL prices extended gains for a third session, with UKOIL futures up 0.5% to $82.36 a barrel and USOIL up 0.7% to $78.45 a barrel. Industry data pointed to shrinking US crude stockpiles ahead of a report from the IEA on the market outlook.
* Gold prices edged 0.1% lower to $2,313.72 per ounce.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE  to access the full HFM Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE  to register for FREE!

Click HERE to READ more Market news. 

Andria Pichidi
Market Analyst
HFMarkets

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
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How Is Politics Trigger a New Wave of Volatility For The Week Ahead?

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* Apple confirm they will delay the release of certain features within the EU due to regulations.
* Apple stocks fell 3.00% within the past week applying pressure on the NASDAQ.
* The US Dollar was last week’s best performing currency increasing in value by 0.47%.
* Investors turn to haven assets due to political uncertainty. French elections will take place over the weekend and the first US presidential debate on Thursday.

USDJPY – Dollar Strength Pushes The Exchange Close To All-Time Highs!

The US Dollar has been increasing in value against the Japanese Yen for 7 consecutive days. The US Dollar was the best performing currency of the week, while the Japanese Yen was the worst performing. The Japanese Yen Index fell 1.36% during the previous week and a further 0.13% this morning. The currency pair is witnessing strong buy signals from most indicators but is under psychological pressure as investors fear another Japanese Government currency intervention.

However, even with an intervention, fundamental elements continue to point towards potential Dollar strength. Over the past week investors have turned to the Dollar as a “safe haven” ahead of some political uncertainty. The US will hold their first presidential debate which will grab investors attention. The debate on June 27th, will be the first in-person debate between the two main candidates. In addition to this, the French elections will take place over next weekend and is likely to create volatility across the board, particularly if the outcome is a change in leadership.

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In addition to the risk factor, the US Dollar also continues to be supported by economic data. While France, Germany and the UK all failed to beat PMI expectations, the US overachieved. The US Services and Manufacturing PMI beat expectations and also rose from the previous month. The Services PMI rose from 54.8 to 55.1 and Manufacturing from 51.3 to 51.7. The only concern for investors is a possible US interest rate adjustment in September 2024 which according to the CME Group is only 59% priced into the market.

Technical analysis, particularly price action is signalling a renewed long signal if the price rises above 159.80. On a 2-hour chart, the price is of the exchange is trading above the 75-bar SMA and 100-bar EMA signalling buyer strength.

USA100 – Apple Warn The EU, But What Will Be The Outcome For the NASDAQ?

The NASDAQ is trading at the 100-Period EMA for the first time since June 5th as the asset retraces downward. What is pressuring the NASDAQ?

The first catching investors attention is Apple stocks which are the second most influential stock for the index. Apple is warning the EU they will either not release or delay the release of new Apple features within the EU. According to the company, these new features are mainly related to AI which will be released to other regions later in the year.

The DMA is the bloc’s key digital rule book, designed to help local start-ups compete with US-based Big Tech. It requires large digital platforms to share data legally and prohibits them from prioritizing their own services over competitors’. The news is triggering a lack of demand and orders which is causing downward impulse waves.

Another concern for investors is the rise in the US Dollar, the VIX trading 0.70% higher and the lower risk appetite. However, investors will also be keen to see if investors take advantage of the lower price. Analysts continue to believe the longer-term outcome will be a bullish trend as long as market conditions remain strong. A positive aspect for the NASDAQ is that, despite the recent price decline, the High Low Index has rebounded above 60.00%. If the price rises above $19,798.74, a rebound becomes potentially more likely.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE  to access the full HFM Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE  to register for FREE!

Click HERE to READ more Market news. 

Michalis Efthymiou
Market Analyst
HFMarkets

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
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Kenya in Turmoil: Youth-Led Protests Shake Economy as Shilling Falls

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Impact on the Kenyan Shilling (KES)

Earlier today, lawmakers in Kenya passed the bill increasing taxes, which now awaits President William Ruto’s assent. The planned tax increases aim to generate an additional $2.3 billion in revenue in the upcoming fiscal year. Ruto intends to reduce the budget deficit from 5.7% of GDP in the current financial year to 3.3% of GDP in the next, as part of efforts to improve Kenya’s fiscal position and comply with an IMF program that requires Nairobi to increase revenue.

The recent youth-led protests against the Kenyan government’s proposed tax increases have had a notable impact on the Kenyan shilling (KES), which has depreciated against the US Dollar. The Central Bank of Kenya (CBK) previously reported that the shilling had appreciated against the Dollar more than almost any other currency in 2024. However, following the news of police and protester violence, the shilling slipped from trading at approximately $0.0077 to the Dollar.

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Background on the Finance Bill

A finance bill is typically presented to parliament before the start of the financial year, which runs from July to June, outlining the government’s fiscal plans. In the 2024/25 bill, the Kenyan government aims to raise $2.7 billion in additional taxes to reduce the budget deficit and state borrowing. Kenya’s public debt currently stands at 68% of GDP, surpassing the 55% of GDP recommended by the World Bank and the International Monetary Fund.

Facing severe liquidity challenges and uncertainty about its ability to access capital from financial markets, Kenya has turned to the IMF, which has urged the government to meet revenue targets to secure further funding.

Protesters are demanding the government abandon the planned tax hikes, arguing that they will stifle the economy and increase the cost of living for Kenyans already struggling financially. This resistance is not unprecedented; last year, the government of President William Ruto, elected in 2022 on a promise to improve the lives of the poor, introduced a housing tax and raised the top personal income tax rate through the finance bill, triggering anger, street protests, and legal challenges.

Proposed Tax Measures

The proposed tax measures causing unrest include new levies on basic commodities such as bread, vegetable oil, and sugar, and a new motor vehicle circulation tax of 2.5% of a car’s value to be paid annually. An “eco levy” on most manufactured goods, including sanitary towels and diapers, is also proposed. Additionally, the bill seeks to increase existing taxes on financial transactions. The government argues that these tax measures are necessary to fund development programs and reduce public debt.
The government had earlier withdrawn several of the most controversial measures, such as a tax on bread and cooking oil, but this did not assuage people’s anger. The finance ministry has stated that these concessions would create a 200 billion Kenyan shilling ($1.56 billion) shortfall in the 2024/25 budget, necessitating spending cuts. Despite these concessions, protesters and opposition parties argue they are insufficient and call for the entire bill to be abandoned.

The Protests

President Ruto has acknowledged the youth-led protests and pledged to engage in dialogue to address their concerns, though the timing of such discussions remains unclear. It is also uncertain whether the protests will intensify if parliament passes the bill. The social media-driven protests lack clear leadership, but many young people have vowed to continue demonstrating. Some protesters cite the arrest of at least two activists since Ruto’s offer of talks as evidence of the government’s lack of goodwill.
The government claims that the withdrawal of some tax proposals demonstrates its willingness to compromise. Nevertheless, police have attempted to disperse predominantly young protesters chanting “Ruto must go!” amidst growing anger over the government’s plan to raise more than $2 billion in new taxes to address the country’s substantial budget deficit.
The demonstrations began a week ago in Nairobi and have since spread to other cities in the country of 54 million people. They are led mostly by young Kenyans, many of whom organized via social media and livestreamed demonstrations on TikTok, Instagram, and other platforms. The protesters are demanding that the government of Kenyan President William Ruto withdraw the bill that would introduce major tax increases, arguing that the measures are hurting ordinary Kenyans already grappling with rising prices for everyday essentials.
The human rights commission has reported that security forces have “abducted” prominent critics of the tax proposals, seizing many from their homes under cover of darkness. Treasury Secretary Njuguna Ndung’u has warned that failing to implement the tax increases could create a $1.5 billion hole in the budget. The government has indicated it would be forced to cut spending, including slashing support for a school food program and the loss-making flag carrier Kenya Airways if the bill fails.
Following initial protests last Tuesday, when the bill was tabled in parliament for debate, the government promised to withdraw planned taxes on bread, cooking oil, locally made diapers, and other products. However, by Thursday, the protests had spread to almost half of Kenya’s 47 counties. Protesters are calling for a “total shutdown” of the country and demanding that Ruto completely drop the finance bill.

Interest payments on Kenya’s debt consume nearly 38% of revenues, according to the World Bank. In January, the IMF provided Kenya with an additional $941 million loan as part of a $3.9 billion bailout that began in 2021.
Multilateral lenders are willing to continue extending credit to Kenya, provided it maintains fiscal consolidation and increases revenue collection.


What comes next?

With the bill now approved, the president has the option to either enact it within 14 days or return it to parliament with suggested amendments. The government might also consider alternative strategies to alleviate tensions, such as postponing the bill, though this is improbable.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE  to access the full HFM Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE  to register for FREE!

Click HERE to READ more Market news. 

Andria Pichidi
Market Analyst
HFMarkets

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
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Market News – European Stocks Follow US Gains, Inflation Pressures Rise in Australia.

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Economic Indicators & Central Banks:

* Australia’s CPI surged to 4% in May, up from 3.6% in April, complicating the central bank’s plans for rate cuts. This increase was mainly driven by higher housing and transport costs.
* European stocks followed the upward trend after a volatile Asian session and a rally in US session overnight, with markets awaiting new trading catalysts.
* China’s central bank once again loosened its grip on the Yuan as the currency traded near the lower end of its fixed daily trading band. A Bloomberg survey indicated that China’s export outlook is set to improve, supporting growth in the world’s second-largest economy despite slowing consumer spending.
* Treasuries lost ground with yields ending a few basis points higher as hawkish comments from the Fed’s Bowman combined with risk-on flows into the NASDAQ and a slightly better than expected confidence report weighed on bonds.
* Investors are likely to continue investing in US stocks at any sign of a pullback as the Fed moves closer to reducing interest rates, according to Societe Generale SA, which expects the easing cycle to begin early next year.

Asian & European Open:

* Asia stock indices rose, while Australian stocks declined. US stock futures edged higher in Asia, bolstered by a rebound in Nvidia shares.
* The bounce in Nvidia after its 3-day rout helped lift tech and in turn the NASDAQ and the S&P500. Nvidia climbed 6.8%,following a $430 billion sell-off. The NASDAQ ended with a 1.26% gain, while the S&P 500 was 0.39% in the green. The Dow dropped -0.76% with a -2.67% plunge in materials leading a broadbased decline.
* Rivian Automotive Inc. surged as Volkswagen AG announced a $5 billion investment to form a joint venture with the electric-vehicle maker.

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Financial Markets Performance:

* The USDIndex firmed but off its 105.78 peak.
* USDJPY held just below the critical 160 per Dollar level, raising concerns about possible market intervention.
* The AUD strengthened to 0.6688 due to faster-than-expected inflation data.
* USOIL held a decline following an industry report indicating a small increase in US crude inventories ahead of official government data.
* Copper fell to its lowest level in over 2 months due to sustained pressure from weak Chinese demand. Gold remained largely unchanged.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE  to access the full HFM Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE  to register for FREE!

Click HERE to READ more Market news. 

Andria Pichidi
Market Analyst
HFMarkets

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
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Market News – Asian Declines, Tech Sector Losses and Anticipation for PCE.

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Economic Indicators & Central Banks:

Several events are on the calendar which are keeping a cautious tone in the markets:

* Although tonight’s presidential debate is much anticipated, it’s unlikely to impact the markets as it won’t provide any real clues on fiscal or monetary policy.
* Asian shares decline, with US futures amid ongoing losses in the tech sector. Friday’s PCE chain price report has Treasury bulls sidelined for now and the run up in yields is tempering activity on Wall Street. Though expectations are for a benign report, upside surprises in Australia and Canadian CPI are generating some concerns.
* Chinese stocks are headed for a technical correction. The earlier rally that pushed Chinese equities into bull markets this year has been losing momentum due to ongoing concerns about an uneven economic recovery. Investors are now focusing on the Third Plenum, the July meeting historically known for significant economic policy announcements by the Communist Party.

Asian & European Open:

* Wall Street rallied with all three major indexes finishing in the green. A bounce in tech boosted the NASDAQ 0.49%, back to 17,805. The S&P500 was up 0.16% and the Dow edged up 0.04%.
* Micron Technology Inc.’s sales outlook fell short of the highest forecasts, denting giant tech companies in late Wall Street trading.
* Asian equities declined on Thursday, with Hong Kong experiencing the largest losses as Chinese tech companies and property developers listed in the city fell. Significant contributors to the drop included electric vehicle maker BYD, travel agency Trip.com, and Tencent.

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Financial Markets Performance:

* The USDIndex was a big winner, climbing to a session peak of 106.130 before closing at 106.079, the highest since late April.
* A surge in USDJPY to 160.79, the highest since 1986, supported. Today the Yen recovered by 0.3% against the Dollar, to 160.29.
* Gold and USOIL prices declined, in part on the firmer Dollar. Bullion fell -0.49% to $2298 per ounce and USOIL slipped -0.2% to $80.36 per barrel.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE  to access the full HFM Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE  to register for FREE!

Click HERE to READ more Market news. 

Andria Pichidi
Market Analyst
HFMarkets

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
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Market News – Dollar corrects ahead of the PCE.

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Economic Indicators & Central Banks:

* The first US presidential debate, as expected, did not significantly impact the markets, and it likely did little to ease concerns regarding the country’s political and economic future. Following the debate, market odds for a Trump win have slightly increased, potentially indicating higher inflation risks.
* This scenario could lead to the Fed maintaining higher interest rates for a longer period, keeping US Treasury yields elevated and the Dollar strong.
* The weaker than expected consumption data and claims data inspired a bounce in Treasuries as well after a few days of losses.
* Wall Street managed small gains.
* UK Q1 GDP growth revised up to 0.7% q/q from 0.6% q/q reported initially. For the BoE stronger than expected growth, however, will make it more difficult to cut rates as underlying inflation pressures remain higher than officials would like.
* The primary market focus remains on the release of the US core PCE, which is expected to have risen 2.6% annually in May, down from April’s 2.8%. If the data meets forecasts, it could strengthen the belief that the Fed will start its easing cycle in September.
* The first round of French elections is set to begin this Sunday.

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Asian & European Open:

* Stocks rose marginally, with some help from a bounce in tech shares. The NASDAQ rallied 0.3%, with the S&P and Dow each up 0.09%.

Financial Markets Performance:

* The USDIndex gave up the 106 handle after testing 106.082 overnight and dipped to 105.708 before clawing back to 105.931 into the close.
* The US Dollar reached a 10-day high against the Mexican peso and gained strength against other trade-sensitive currencies, including the Canadian dollar.
* The Yen, facing relentless pressure from the US Dollar, surged past the 161 Yen mark, peaking at 161.27, while the Euro also reached a record high against the Japanese currency.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE  to access the full HFM Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE  to register for FREE!

Click HERE to READ more Market news. 

Andria Pichidi
Market Analyst
HFMarkets

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
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French Elections Spark Risk Rally as Far-Right Falls Short!

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* Projections show France’s Far Right Party will lead the first round of parliamentary elections.
* The Euro is the day’s best performing currency, increasing in value by more than 0.40%.
European Indices soar! The Euro Stoxx 50 rises 1.85% and the DAX 1.00%.
* Investors turn their attention to today’s German Inflation data. Analysts expect the German Consumer Price Index to rise 0.2%.

FRA40 (CAC 40) – French Elections Trigger Volatility And “Bottom Fishing”!

By the market close on Friday, the French CAC was almost at its lowest level for 2024. Since Sunday’s elections, all European indices have risen and the French CAC trades 2.65%. Investors have bought the dip triggering a large price gap and a significantly higher price. Nonetheless, the price remains 7.00% lower than the index’s all-time high. The price is being influenced by three major factors; the upcoming earnings data, higher appetite towards stocks and of course the French elections.

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Following an exceptionally high voter turnout, the National Rally is leading with 34% of the vote. The left-wing New Popular Front is in second place with 28%, and President Emmanuel Macron’s Ensemble Alliance has dropped to a disappointing third place with 20%, according to initial estimates. Although the National Rally seems poised to secure the most seats, France could be facing a hung parliament and increased political uncertainty. Even so, technical analysis signals a possible correction upwards, and the market is showing a clear “risk-on” sentiment. The higher risk appetite is due to the far right failing to win a majority. Bottom fishing refer to investors buying the bottom!

The risk-on sentiment can be seen across the global stock market. All European and US indices are increasing on Monday. The Euro Stoxx 50 has risen 1.85%, the DAX 1.00%, the SNP500 0.35% and the NASDAQ 0.40%. Some Asian stocks also continue to rise. Lastly, the VIX index trades 1.59% lower which also indicates a higher risk appetite.

In terms of technical analysis, the CAC40 is attempting to establish itself above the 75-Bar EMA and above the 50.00 on the RSI. On smaller timeframes, the momentum is also forming bullish crossovers further indicating an increase. The only concern for investors is the resistance level at 7,729.48, which pressured the index last week. If the price forms a breakout above this level, the index will likely see buy signals strengthen. If the price retraces to 7,614.55, traders have the opportunity to trade the upcoming breakout. However, if the price falls below this level, the buy signal will no longer be valid for the time being.

EURUSD – Investors Turn Their Attention To The German Inflation Reading!

The EURUSD continues to trade higher with strong momentum and has broken through the most recent resistance levels. The Euro is the day’s best performing currency with the index trading 0.40% higher, while the US Dollar is the worst performing. The US Dollar Index is trading 0.35% lower today so far.

However, investors should be cautious about the price action seen so far as volatility can quickly change after today’s German inflation data. Analysts expect the German Consumer Price Index to read 0.2%, slightly higher than the previous month. If the inflation reading is lower, the Euro potentially can come under selling pressure. In June, the number of unemployed in Germany rose by 19,000, surpassing the forecast of 14,000, with the unemployment rate reaching 6.0% instead of the expected 5.9%. Experts highlight the weakness of the German labor market, noting that companies remain cautious about hiring new employees, which negatively impacts the country’s economy. However, today’s inflation data will be the main driver along with the French elections and a potential hung parliament.

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Technical analysis points towards buyers controlling the market and the exchange rate yet to obtain an “overbought” price. Currently, the RSI trades at 73.00 which means the price can rise a further 0.20% becoming overbought. However, this would depend on momentum.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE  to access the full HFM Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE  to register for FREE!

Click HERE to READ more Market news. 

Michalis Efthymiou
Market Analyst
HFMarkets

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
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A Hawkish ECB Advise No Cut for July! European Stocks Fall!

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* European stocks unable to hold onto gains and honour the recent resistance levels.
* German inflation declines back to 2.2% as inflation in June eases more than expectations.
* ECB President Lagarde indicates the central bank may keep interest rates unchanged this month to gather more inflation data.
* Oil prices at a 2-month high due to a rise in geo-political tensions in the Middle East and Caribbean Hurricane.

GER40 – A Hawkish ECB Pressures European Stocks!

The German DAX fell during the European session due to the strong price gap which measures 1.04%. As a result, the index still rose by 0.48% by the end of the US trading session. The index is being supported by two factors: The failure of France’s far-right party to win a majority, which increased risk sentiment, and German inflation which read lower than expectations.

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However, the DAX is also slightly under pressure from the ECB President’s comments. Mrs Lagarde said the central bank will pause and not lower rates for the time being. The ECB is looking to obtain 2 months of inflation data before determining whether the risk of inflation is subsiding. If not, further adjustments. This morning, Pierre Wunsch, a member of the ECB governing council, said the economy is underperforming but the ECB believe it will recover. Philip Lane advises the ECB believes the Eurozone’s inflation will remain at the “mid-twos”. A concern for inflation is the current rise in oil prices which currently is close to a 2-month high and continues to rise in today’s Asian session.

The data supports a further cut in rates, but comments from the ECB don’t correspond with the latest inflation reading. The hawkish comment from the ECB is known to have pressured the DAX, but technical analysis will be key as bullish price movement is still possible. Particularly as German inflation falls back to 2.2%. A key price driver for the day will be the Core CPI Flash Estimates at 09:00 GMT and President Lagarde’s speech at 13:30 GMT.

In terms of technical analysis and signals, the DAX opened on a bearish price gap and has declined a further 0.20%. However, price gaps are normally filled and can trade back into a correction. In addition to this, the price on the 2-hour chart continues to remain above the 75-bar EMA and 100-bar SMA. If the price declines below 18,267.31, sell trades can materialize, otherwise, the main signal on the 2-hour chart, remains a bullish trend with large retracements.

EURNZD – The NZD Continues To Be The Worst-Performing Currency!

The best performing currency continues to be the Euro as it was on Monday. The Asian session’s worst performing currency is the New Zealand Dollar. On the 2-hour chart, the exchange rate is witnessing strong signals indicating a bullish trend, as seen since June 24th. However, the price on smaller timeframes indicates the asset is about to form a retracement. Therefore, investors should note the volatility despite the clear bullish signals.

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At this point, traders can’t use the breakout level or Fibonacci entry points due to the head and shoulders pattern and the significantly higher price. The asset has risen in value for 5 consecutive days regardless of the latest German inflation reading. One of the key drivers for the Euro is the hawkish comments from the European Central Bank. However, this can lose its importance if today’s inflation estimates read lower than expectations.

If the inflation estimates are lower than expectations and the Euro declines, a signal for a retracement will be triggered at 1.77083. However, a longer-term downward trend is not yet possible unless the exchange rate gains larger bearish momentum. Whereas, if the Eurozone inflation estimates read more than 2.5% and the EURNZD breaks the 1.77442 level, buy signals are again an option.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE  to access the full HFM Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE  to register for FREE!

Click HERE to READ more Market news. 

Michalis Efthymiou
Market Analyst
HFMarkets

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
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NASDAQ Eyes All-Time High as Employment Data Eases Investor Concerns.

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* The JOLTS Job Openings comes in slightly higher than expectations improving investor sentiment.
* The NASDAQ rises 0.88% after the release of the latest US JOLTS Job Openings.
* Federal Reserve chairman advises inflationary data shows sign of inflation “cooling”. Reuter’s SmartEconomics predicts a Consumer Price Index reading of 0.1% for June.
* Investors turn their attention to the latest employment data and tonight’s FOMC Meeting Minutes.

USA100 – Employment Data Eases Concerns and Pushes The NASDAQ Close To An All-Time High!

The NASDAQ has risen 1.40% this week as market risk appetite improves, and institutions position themselves for the next earnings season. The NASDAQ has now formed a second higher high and a third higher low. For this reason, technical analysts are pointing towards a potential bullish trend, while economists also advise the NASDAQ is likely to perform well in the second half of the year.

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The bulls quickly entered the market during yesterday’s trading session due to the positive employment data. Analysts thought the JOLTS Job Openings data would fall to the lowest since COVID lockdowns, but the figure read 180,000 more vacancies. Investors bought the news as the release confirms that the employment sector has become more “balanced”, remaining strong but simultaneously not strong enough to significantly increase salaries and inflation.

Another positive factor is the comments from the Federal Reserve’s Chairman. Mr Jerome Powell, after some persistently high inflation reports at the start of 2024, said that the data over the past 2 months “do suggest we are getting back on a disinflationary path.” However, economists are also noting that oil prices have risen by 8.40% in June 2024. According to economists, if prices remain around $85 per barrel, inflation potentially can become stickier.

However, even if inflation does become stickier, investors will soon start to turn their attention to the upcoming earnings season. Earnings season will start on Friday 12th July, but will gain momentum on the 17th! When monitoring individual components for the NASDAQ, in Tuesday’s session, 75% of the stocks rose in value and 83% of the most influential stocks rose.

The price of the NASDAQ is currently witnessing buy signals with the price trading comfortably above the 75-bar EMA and the Volume Weighted Average Price. Oscillators are also indicating buyers are controlling the market, but technical analysts are closely monitoring to ensure momentum continues. Breakout levels can be seen at $20,036.03 and $20,045.64. The NASDAQ’s all-time high is at $20,128.31.

EURUSD – The US Dollar Gains Momentum, Investors Focus On Upcoming Economic Data!

The price of the EURUSD during the Asian Session trades significantly lower which is primarily being driven by the US Dollar. However, the EURUSD quickly gains bullish momentum as the European session starts. Simultaneously, the Euro is increasing in value against most currencies and is only struggling against the AUD. US Dollar has largely been driven by positive economic data, but investors also should note dovish comments from the Fed can apply pressure.

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The price of the US Dollar will mainly be influenced by three economic events. The ADP Non-Farm Employment Change, the ISM Services PMI and tonight’s FOMC Meeting Minutes. If the data reads higher than expectations, the price potentially can rise further.

Currently the EURUSD is trading within a small retracement upwards. Therefore, short term traders will closely monitor when momentum is regained, and a breakout is formed. The closest breakout level currently can be seen at 1.07354.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE  to access the full HFM Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE  to register for FREE!

Click HERE to READ more Market news. 

Michalis Efthymiou
Market Analyst
HFMarkets

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
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Gold and Stocks Rise As Markets Increase Rate Cut Bets For September!

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* The NASDAQ and SNP500 increase to new all-time highs despite economic and employment data reading lower than expectations.
* The FOMC continues the previous verbal trend set by the Chairman, Jerome Powell, advising inflation needs to decline further.
* The Chicago Exchange Fed Tool confirms a 67% chance of an interest rate cut in September. Previously, there was a 59% possibility.
* Gold quickly increases as an interest rate cut looks more likely for September.

USA100 – Bad News is Good News for the NASDAQ!

This week, the NASDAQ is the second best-performing index behind the NIKKEI225. The NASDAQ is now trading at its highest price ever and has added more than 23% in 2024. The price is being driven by investors’ belief that the Federal Reserve will almost certainly cut interest rates in September. As a result, the stock has become more attractive and consumer demand potentially can improve.

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This week so far, the FOMC Meeting Minutes and the chairman of the Federal Reserve have indicated that inflation is on the right path. However, the Federal Reserve will need inflation to continue to decline between now and September’s Rate decision. Even with just a 0.1% monthly decline, which would reduce inflation to 3.00%, market pricing indicates that the Federal Reserve will still alter its policy!

The latest data also supports the possibility of frailty within the US economy and growth. The ISM Services PMI fell to its lowest in 2024, the weekly unemployment claims again read higher and the ADP Employment Change fell short. However, the JOLTS Job Openings beat expectations. Therefore, the data pressures the Fed that the economy will soon need support, but simultaneously does not cause panic amongst investors. At the moment, bad news continues to be good news for the stock market. However, the question is if this will continue when tomorrow’s NFP data is released.

Many believe the trend will continue regarding “bad news is good news”. However, most also believe that the ideal release would be slightly poorer than expectations. Analysts currently believe the Unemployment Rate will remain at 4.00%, the NFP to add 194,000 new individuals and for salaries to rise 0.3%. Volatility throughout today may be muted due to the US bank holiday, however, volatility potentially can quickly rise as Asian Market’s reopen tomorrow morning!

A positive factor for the NASDAQ continues to be the upcoming earnings data, but also hopes that tensions in the Middle East may subside. Reports confirm that Israel and Hamas may be close to an agreement which will stop the current war, even if only temporarily. If an agreement is reached, the news will be deemed as positive for the stock market and can reduce oil prices. Oil prices this morning have so far fallen 0.35%!

XAUUSD – Gold Benefits From Rate Cute Bets!

Gold’s price rose as the US Dollar became less attractive to investors due to potential lower interest rates in September. The Chicago Exchange Fed Tool confirms a 67% chance of an interest rate cut in September. Previously, there was a 59% possibility, hence a considerable rise which can support Gold. If the possibility continues to rise, investors may increase exposure to Gold. The price of Gold rose 1.15% on Wednesday.

If the employment data is weaker than what analysts are currently expecting, investors potentially may turn to Gold as an alternative. This is due to the commodity’s safe haven nature and its use as a hedge. For example, if the US Unemployment Rate rises to 4.1% and the NFP data reads 180,000, demand for Gold can quickly increase!

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Currently the price of Gold is trading lower during this morning’s session, but has not yet formed a lower low. If the price drops to a lower low, the trend indicates a larger retracement or a full correction back to $2,338.65. The smaller timeframes currently point to this scenario, but this will change if the price increases above $2,362.44.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE  to access the full HFM Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE  to register for FREE!

Click HERE to READ more Market news. 

Michalis Efthymiou
Market Analyst
HFMarkets

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
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NFP Is Here! How Will Today’s NFP Impact The NASDAQ

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* Labour win UK Elections, receiving an unconditional majority of seats in the House of Commons (410 out of 650).
* The British Pound and FTSE100 increase in value as Labour wins an outright majority.
* The Japanese Yen sharply increases in value as the US Dollar underperforms ahead of the US employment data.
* Investors turn their attention to today’s NFP release and Unemployment Data!

USA100

The NASDAQ quickly increases in value as the Asian Market opens and the US bank holiday ends. Investors now turn their attention to this afternoon’s employment data. This morning the price quickly rose 0.48%, continuing the trend of the past week.

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The “bullish” momentum that accelerated throughout the week as positions in the US Dollar weakened is gradually slowing down ahead of today’s release of the June labor market report. This report could influence the US Federal Reserve’s decision on reducing borrowing costs by the end of the year. Earlier in the week, Fed Chair Jerome Powell delivered a speech, and the June meeting minutes were released. The market reacted with a higher risk appetite, even though officials reiterated the need for further evidence of inflation reduction to the target 2.0% before initiating a monetary easing program.

Investors also continue to position themselves for the upcoming earnings data and an interest rate cut in September 2024. An ideal NFP release for the stock market will be a slightly worser reading. For example, NFP to come in as expected but for the unemployment rate to rise to 4.1%. This afternoon’s employment data is likely to trigger significantly higher volatility. However, investors will also be concerned if the price of oil continues to rise as it has over the past 4 weeks. If the NFP data triggers higher oil prices, investors will be cautious that it does not apply upward pressure on US inflation. Analysts expect the NFP to add a further 191,000 employed individuals.

Currently the price is trading at an all-time high and is witnessing buy signals. The price forms a bullish crossover and trades significantly above most moving averages. However, the price is not yet thought to be overpriced based on the RSI. All global indices trade higher, which indicates a strong sentiment towards the equity markets.

Lastly, of the top 5 most influential stocks for the NASDAQ, 4 are trading higher in pre-trading hours. This includes Microsoft, Apple, Alphabet and Amazon. Currently, NVIDIA trades 0.15% lower.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE  to access the full HFM Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE  to register for FREE!

Click HERE to READ more Market news. 

Michalis Efthymiou
Market Analyst
HFMarkets

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.v
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Market News – Asian & European Stocks Decline, Bitcoin Falls, and Key Economic Events Ahead

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Economic Indicators & Central Banks:

* Asian stocks mostly fell today, along with European and especially French bond markets which sold off modestly, with the Euro dropping on the shock French election outcome.
* Europe: The French leftist alliance is the surprise victor, winning the most seats. This outcome potentially limits the influence of the left-wing New Popular Front coalition and Marine Le Pen’s National Rally, both of which support increased public spending.
* Losses in the Euro and European bonds were tempered by the uncertainty still surrounding the structure of the next French government. The key questions for the markets include who the prime minister will be, how effectively they can collaborate with the far left to pass legislation, and crucially, what this will mean for France’s fiscal discipline.
* US: The US Jobs report revealed modest downside payroll surprises via revision and weak civilian jobs data that raised the jobless rate and exacerbated the big household-establishment divergence since late-2023.
* China: The PBOC aimed to gain more control over market interest rates by announcing additional open market operations and tightening the band for short-term rate fluctuations.
Key events: Fed Chair Powell testimony and US inflation data are key events. Earnings reports from major US banks, including JPMorgan Chase & Co., are anticipated, along with rate decisions in New Zealand and South Korea.

USA100

The NASDAQ quickly increases in value as the Asian Market opens and the US bank holiday ends. Investors now turn their attention to this afternoon’s employment data. This morning the price quickly rose 0.48%, continuing the trend of the past week.

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The “bullish” momentum that accelerated throughout the week as positions in the US Dollar weakened is gradually slowing down ahead of today’s release of the June labor market report. This report could influence the US Federal Reserve’s decision on reducing borrowing costs by the end of the year. Earlier in the week, Fed Chair Jerome Powell delivered a speech, and the June meeting minutes were released. The market reacted with a higher risk appetite, even though officials reiterated the need for further evidence of inflation reduction to the target 2.0% before initiating a monetary easing program.

Investors also continue to position themselves for the upcoming earnings data and an interest rate cut in September 2024. An ideal NFP release for the stock market will be a slightly worser reading. For example, NFP to come in as expected but for the unemployment rate to rise to 4.1%. This afternoon’s employment data is likely to trigger significantly higher volatility. However, investors will also be concerned if the price of oil continues to rise as it has over the past 4 weeks. If the NFP data triggers higher oil prices, investors will be cautious that it does not apply upward pressure on US inflation. Analysts expect the NFP to add a further 191,000 employed individuals.

Currently the price is trading at an all-time high and is witnessing buy signals. The price forms a bullish crossover and trades significantly above most moving averages. However, the price is not yet thought to be overpriced based on the RSI. All global indices trade higher, which indicates a strong sentiment towards the equity markets.

Lastly, of the top 5 most influential stocks for the NASDAQ, 4 are trading higher in pre-trading hours. This includes Microsoft, Apple, Alphabet and Amazon. Currently, NVIDIA trades 0.15% lower.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE  to access the full HFM Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE  to register for FREE!

Click HERE to READ more Market news. 

Michalis Efthymiou
Market Analyst
HFMarkets

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
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Market News – Stocks Under Pressure Ahead of Powell.

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Economic Indicators & Central Banks:

* Trading was nondescript with the markets digesting recent data, including the jobs report, and events including the elections overseas.
* Asian stock markets were supported, however, the positive mood didn’t spill over into Europe, where indexes are mostly lower.
* US futures are finding some buyers but investors are cautious ahead of Powell’s testimony. Powell will be questioned on the prospects for rate cuts.
* Japan: the BoJ will speak face-to-face with market participants over the next couple of days as the bank tries to set a realistic pace for the planned reduction of bond purchases.
* China: investors continue to weigh the bank’s new liquidity operations. The bank is aiming to take greater control over short-term borrowing costs and investors seem to take it like a rate hike, which put pressure on bonds. Markets are also looking ahead to the biggest annual policy meeting, with hopes of additional stimulus measures.

Asian & European Open:

* Wall Street was mixed. Strength in big tech rallied the NASDAQ and S&P500, albeit marginally, with gains of 0.28% and 0.10%, respectively. But the gains were enough for more fresh highs, the 25th and 35th of the year.
* Nikkei and Sensex touched fresh all-time highs, after the S&P500 led the way.
Long bonds are also down in Europe and the US, after a drop in yields across key Asian markets.

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Financial Markets Performance:

The USDIndex softened to a session nadir of 104.80 on broadbased weakness, and especially as GBP and EUR stabilized. But the buck rebounded confidently to 105.09.
Bitcoin steadied but remains below the key $59k level.
Oil remained relatively stable following a 2-day decline, as Hurricane Beryl appeared less likely to cause significant disruptions to Texas’ crude infrastructure. However it’s hovering at the key 81.60 level (repeated resistance in the mid of June).
Gold steadied after experiencing its largest drop in two weeks on Monday, while copper edged lower.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE  to access the full HFM Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE  to register for FREE!

Click HERE to READ more Market news. 

Andria Pichidi
Market Analyst
HFMarkets

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
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Market News – Stocks advance, Kiwi & Dollar dip.

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Economic Indicators & Central Banks:

The rising political uncertainties, and the wait for more data to clarify the Fed’s rate cut path, are combining with summer doldrums to keep trading quiet and range bound.

* Fed Chair Powell did not say anything really new in his Senate testimony, as expected. There were a few nuances, though, that further support expectations that the next move will be a cut.
* Financials led the way for the broad index after Chair Powell indicated a re-proposal for Basel III rules would be sent out, giving banks more time and breathing room.
* RBNZ delivers dovish hold, as the comments set the stage for a rate cut later in the year and the NZD weakened as local bonds rallied. New Zealand’s central bank maintained its official cash rate at 5.50%, but signalled that it is inching closer to a rate cut. The statement said “restrictive monetary policy has significantly reduced consumer price inflation, with the committee expecting headline inflation to return to within the 1-3 percent target range in the second half of the year.”
* China’s consumer prices saw a slight increase in June, staying close to zero for the 5th month, indicating ongoing deflationary pressures hindering economic recovery. Meanwhile, factory-gate prices remained in deflation.
* Japan’s largest banks urged the Bank of Japan to significantly reduce its monthly bond purchases during recent central bank hearings.

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Asian & European Open:

* Wall Street and Treasuries were mixed. The S&P500 advanced 0.10% to 5577, a 6th straight day of gains (the best since the start of the year) and another fresh high, the 36th record for 2024. The NASDAQ was 0.11% firmer at 18,429, also at a new peak, its 26th for the year.
* Japanese stocks advanced, while those in China and Australia declined. Nikkei surged to another record high, approaching 42,000.
* The heavy tilt towards the tech sector has heightened risks if the AI-driven rally stumbles. Valuations are high, and earnings growth is expected to slow, adding uncertainty for investors banking on Big Tech’s continued rise. Citigroup strategists, suggest it might be time to take profits in leading AI stocks, despite strong sentiment and better-than-expected free cash flow projections for these firms.

Financial Markets Performance:

* The USDIndex declined from 105.208 back to 104.70.
* Oil prices have continued to decline, as Chinese demand and continued uncertainty over the timeline for Fed interest rate cuts outweighed signs of another inventory draw in the US.
* Gold slightly higher at 2372 amid Dollar strength.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE  to access the full HFM Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE  to register for FREE!

Click HERE to READ more Market news. 

Andria Pichidi
Market Analyst
HFMarkets

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
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Date: 11th July 2024.

Stocks Rise as Analysts Predict Inflation Will Drop to a 5-Month Low.

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* NASDAQ’s most influential stocks witness significant gains on Wednesday including Apple +1.88%, Microsoft +1.46% and Alphabet +1.17%.
* Investors fix their attention on today’s US Inflation rate which analysts expect to fall from 3.3% to 3.1%. Markets predict US Core Inflation to remain at 3.4%.
* KeyBanc Capital Markets raised NVIDIA’s target price from $130 to $180, maintaining the overweight rating.
* Gold increases in value ahead of today’s inflation data and outperforms all currencies.

USA100 (NASDAQ) – Stocks Rise Ahead Of Today’s Inflation Reading!

The NASDAQ increases in value for a fourth consecutive day as investors price in a rate cut for September. On Wednesday, the price of the index rose 1.05%, but the bullish price movement will depend on today’s inflation reading. Investors are anticipating a decrease in inflation, but if this expectation is not met, it could result in downward pressure. However, if inflation does decline to 3.1% or lower shareholders are less likely to sell shares ahead of earnings season. As a result, the bullish trend is potentially likely to continue.

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The September cut scenario has become the main outcome due to the rise in unemployment and the change in the tone of the Federal Reserve. Earlier this week the Fed Chairman said the employment sector is showing signs of weakening while yesterday the Fed Governor advised inflation will reach the target without the Unemployment Rate rising much further. The lower interest rates support the economy but also makes bonds and the US Dollar less attractive.

Only 25% of the NASDAQ’s 100 stocks declined on Wednesday which applied minimal pressure. The bullish price movement was largely driven by the top 8 most influential stocks which all rose in value. These 8 stocks make up 49.08% of the whole index. The only stocks which applied minor pressure were Netflix which fell 1.18% and Intuit, down 2.70%. The two stocks hold a weight of 3.08%.

One of the stocks which have significantly supported the NASDAQ in 2023 and 2024 so far is NVIDIA. According to leading analysts, the company’s quarterly report is set slightly later than its main competitors. This could provide an advantage and an opportunity to improve its performance. KeyBanc Capital Markets have raised the target price from $130 to $180. They attribute this to higher-than-expected demand for GB200 graphics processors, particularly the more expensive NVL72 configuration, which is gaining more interest compared to the previously popular NVL36. Wolfe Research LLC has also adjusted its price target from $125 to $150.

Currently the price is trading within a symmetrical triangle meaning the price shows a lower high but a higher low. Volatility is likely to remain minimal until the US Consumer Price Index. If the Consumer Price Index reads as expected and the price increases, traders should be cautious that profits are not hit, and the price retraces. In the medium to longer term, the price remains above the 75-Period EMA and 100-Period SMA. This indicates buyers are controlling the market. Based on price action, buy signals are likely to materialize again if the price rises above $20,697.40.
XAUUSD – Gold Gains Momentum, Capitalizing on the Weaker Dollar!

The price of Gold has benefited from the lower price of the US Dollar and the pricing of an interest rate cut by September. The commodity is forming higher highs and higher lows, which is a positive sign, but traders should note retracements are quick and large, meaning caution is wise.

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Another positive sign is the price of Gold is currently performing better than all other currencies within the market. However, investors will largely be monitoring the US Dollar which is currently declining 0.08%.

A weaker US Dollar has the potential to support the price of gold; however, if inflation falls significantly below current expectations, it may undermine gold’s bullish price action. This is because gold is also used as a hedge against inflation. According to the Fibonacci retracement levels, buy signals will form if the price breaks above the $2,381.62 levels.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE  to access the full HFM Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE  to register for FREE!

Click HERE to READ more Market news. 

Michalis Efthymiou
Market Analyst
HFMarkets

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
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Date: 12th July 2024.

Market News – The Aftermaths of Inflation.

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Economic Indicators & Central Banks:

* Treasuries surged after a much cooler than expected CPI report that saw Fed funds futures price in a -25 bp rate cut for September, more than 2 quarter point moves over the rest of the year, and 3 cuts by the end of Q1 2025.
* Australian and New Zealand government bonds rallied, taking cues from their US counterparts.
* European stocks open muted, following a sharp decline in Asian equities driven by a significant drop in technology stocks. Despite this recent downturn, global stocks are on track for their 6th consecutive weekly gain, the longest streak since March, buoyed by expectations of Fed easing which have supported overall risk sentiment.

Asian & European Open:

* Wall Street was not as enthused, although it’s coming off of prior strong gains. The NASDAQ slumped -1.95% and the S&P500 slid -0.88% to 5584. Cash fled some of the safety of the mag 7. The Dow was up 0.08%.
* Disappointing earnings from Delta and PepsiCo weighed heavily.
* The Euro Stoxx 50 futures showed minimal change, mirroring the stability seen in US stock futures after a tech-driven selloff on Thursday.

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Financial Markets Performance:

* The USDIndex took it on the chin, falling to 104.07 from the high of 104.99 on the dovish Fed outlook.
* A lot of the weakness came from JPY as USDJPY crashed 4-handles, as there were reports of intervention. The Bank of Japan conducted rate checks with traders, reinforcing the belief that authorities had intervened in the market on Thursday to support the currency.
* Oil prices rallied for a 3rd day in a row boosted by the US inflation which cooled broadly in June to the slowest pace since 2021. Bets rose that the Fed will start to reduce borrowing costs this quarter.
* Gold corrects some of yesterday’s gains, back to 2400.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE  to access the full HFM Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE  to register for FREE!

Click HERE to READ more Market news. 

Andria Pichidi
Market Analyst
HFMarkets

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
HFblogNews
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Date: 16th July 2024.

Pound Leads Currencies This Month Despite Upcoming Rate Cut!

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* The Pound continues to be the month’s best performing currency and attempts to break resistance levels as the currency rises close to a 12-month high.
* Goldman Sachs beats earnings and revenue expectations boosting banking stocks. Goldman Sachs, JP Morgan and Wells Fargo stocks increase.
* The Dow Jones outperforms the NASDAQ and SNP500 on Monday. Goldman Sachs and Caterpillar were the best performers.
* Federal Reserve Chairman advises economic growth likely to slow and employment to become more balanced.

GBPUSD – Economists Expect The UK Economy To Perform Better Than Previous Expectations.

The GBPUSD, after increasing in value for 2 consecutive weeks, finds itself close to a 12-month high and closer to its traditional value prior to COVID and PM Truss. The British Pound has been the best performing currency of July and has risen in value against all major currencies. The US Dollar has been one of the worst performing, but traders may also benefit from glancing at the weakest which currently are the NZD and JPY.

Technical analysis in recent days has been pointing towards an upward trend as the price trades above the 75-Period EMA and 100-Period SMA. Fundamental analysis is also supporting a weaker Dollar as a rate cut becomes certain for September 2024.

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Though, the price over the past two trading days has struggled to increase above the 1.29897 resistance level. The exchange rate has failed to break this level on 3 attempts and mainly formed a psychological price for investors. However, this will largely depend on today’s US Retail Sales and tomorrow’s UK inflation rate.

Analysts believe the UK inflation rate will fall from 2.00% to 1.9%, which is below the Bank of England’s target. Nevertheless, the regulator will be happy to allow inflation to fall slightly below due to the cost-of-living crisis of the past 3 years. The Bank of England’s rate decision will take place on August 1st, and an interest rate cut will become more likely if inflation falls to 1.9%. Currently, most economists expect a rate adjustment.

A rate cut traditionally is bad for the currency, however, it can make the economy more attractive for foreign investors. However, investors should note, currency traders will simultaneously price in a cut from the Fed. The Chicago Exchange for the first time fully prices in a rate cut for September.

For the US Dollar, the latest developments continue to point towards slower economic growth and unemployment rising slightly higher. Yesterday’s Empire State Manufacturing Index again read lower than expectations. In addition to this, Jerome Powell, the Fed Chairman, also reaffirmed this is also the Central Bank’s expectations. Whereas the analysts expect the UK economy to rebound faster than previous years. Analysts also note that the US Bond Yields trade 24-points lower, which is known to be negative for the Dollar.

Therefore, many fundamental factors also indicate a GBPUSD bullish trend. However, in the short-term technical analysis will be key. Traders may opt to keep buy trades short term unless strong momentum indicates a break above the key resistance level which is close. However, if a retracement is to continue, price action points towards the retracement falling down to 1.29238.

USA30 – The Dow Jones Outperforms All Indices!

The Dow Jones, which traditionally is less prone to trends, was the best performing index on Monday. Yesterday, it rose to an all-time high after increasing for 3 consecutive weeks. The bullish trend has partially been due to the market pricing in an interest rate cut for September but also earnings data from the banking sector.

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Goldman Sachs is the latest bank to release their quarterly earnings report. The bank’s earnings were slightly higher than previous expectations, but lower than the previous quarter. Revenue beat Wall Street’s expectations by 2.89%. As a result, stocks from the banking sector rose in value helping the bullish trend of the Dow Jones.

However, investors are concerned regarding comments from key economists and the Fed’s Chairman. The recent forward guidance is lower economic growth and higher unemployment. This can be concerning for the stock market if economic data weakens, and leading companies provide similar guidance. Another concern is that only 55% of the Dow Jones’s 30 stocks rose in value. Though, the 55% that rose saw stronger volatility.

Today UnitedHealth Group will release their earnings report. Currently, analysts believe the earnings will more or less be similar to the previous quarter. UnitedHealth Group is the index’s most influential stock and is likely to create volatility. However, this may also potentially be a retracement, not necessarily a guaranteed upward trend.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE  to access the full HFM Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE  to register for FREE!

Click HERE to READ more Market news. 

Michalis Efthymiou
Market Analyst
HFMarkets

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
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